Marketing Plan Created by: The 4 P’s Jessica Burg Alice Popescu Ranjita Shetty Ritesh Maskay Project Summary Car sharing is an economical and eco-friendly mode of transportation that is designed to fulfill a just-in-time need for personal access to passenger cars. This transportation network encourages people to be socially and environmentally responsible by minimizing private vehicle ownership. Car sharing started gaining popularity in the early 1990s in Europe.
Today, such fleet of automobiles operates in 600 cities around the world, in 18 nations, and 4 continents. In the United States, a Massachusetts based car-sharing company Zipcar is the industry leader with over 400,000 users in 13 major cities, and 150 college campuses. Zipcar mainly operates in urban areas and in college towns where car ownership is lower and parking is expensive and/or limited. People are enjoying the convenience of reserving the car over the phone or online for a nominal fee on an hourly or per day basis.
The cost of service includes the fuel, car maintenance, and insurance charges. Currently, the main goal of Zipcar is to enter into a new market segment at the University of New Orleans in New Orleans, Louisiana. Hence, the 4 P’s marketing team has developed an extensive marketing plan to introduce this revolutionary transit system to a much deserving community of the University of New Orleans. Based on our analysis, a public relation strategy is a very effective marketing strategy that can give Zipcar’s car sharing service on campus.
Even though there are many hurdles to overcome in order to implement Zipcar on UNO’s campus, our implementation schedule has the full Zipcar transportation service on campus in the beginning of the Spring 2011 school semester.. I. What is ZipCar? Zipcar is the world’s largest car sharing and car club service. It is an alternative to traditional car rental and car ownership. Zipcar transportation offers services to anyone interested in available geographic areas; ages 18+, and usage charges are by the hour or the day depending on the needs of the customer.
Car sharing is an evolving concept that targets people that desire a hassle free lifestyle. As a leader in this market ZipCar wants to continue to focus on excellent services and to expand throughout the U. S. bringing their services to more cities in need of an eco friendly, easy to use, and economical way of transportation. According to CNN Money, Zipcar is the best new idea in business earning annual revenues of $130 million and continuing to grow at approximately 30% a year. Zipcar’s mission statement is to “change the world through urban and environmental transformation”.
Scott Griffith, the 50 year old CEO sets an example of how it’s done by being one of the over 400,000 members who rely on the company’s handy gassed up cars to get around. According to the Boston Globe, Zipcar currently owns a fleet of 5,000 vehicles parked throughout most neighborhoods in major cities. There is never any paperwork or standing in line required to borrow a car. A member just waves their membership card over the windshield and the doors pop open. The best part of it all is that the gas, insurance, and car maintenance are included in the hourly rate of $7.
However, it is important to note that Zipsters, people with a membership to Zipcar, must pay an annual fee of $50 plus hourly/daily charges, and first-time users are required to pay an application fee of $25. Zipcar has partnered with more than 150 universities throughout the U. S. to help students, faculty and staff alike by providing environmentally green cars on a shared bases to university communities where parking is a problem and car ownership is difficult and costly. II. Problem Definition
The major goal of Zipcar at this particular moment is to enter into a new market segment at the University of New Orleans, Louisiana. By entering this market Zipcar is trying to broaden its horizon and offer its services in areas where there is great potential and little competition. A major impediment to a successful entry into this new market segment at UNO is the lack of the car sharing concept, hence leading to a lack of brand recognition for Zipcar. Car sharing is a fairly new concept, which has not yet fully penetrated the New Orleans area of the U. S.
Thus it is key for any company, such as, Zipcar to not only foster awareness of the car sharing concept to the UNO community but also to bring about knowledge of the company as a whole. Zipcar will focus on a marketing strategy that will enhance why its services are so important to consumers and what sets Zipcar apart from any other car sharing company. III. Environmental and Industry Analysis Industry Analysis Car sharing is a car rental service sold in hourly increments that is designed to fulfill a just-in-time need for personal access to passenger cars.
In this particular industry there are over 200 car sharing programs, operated in over 600 cities. It is believed that in the long run the car sharing transportation service industry will prosper especially due to the economic problems most people are facing in today’s world. Cars have become more of a luxury good rather than a necessity good. According to the Washington Post, the recession is reminding Americans of a lesson they first learned in childhood, “Share and share alike. ” Hence, the car sharing service industry has had a 70% membership increase since the recession set in.
The economy reflects the way the Americans have cut back and a good example is the car sharing industry. People are opting to pay a nominal hourly/ daily fee for car use to run errands, go to lunch, etc. without worrying about paying additional costs for gas, car maintenance, and insurance premiums. Zipcar is currently the market leader boasting over 400, 000 members focusing on colleges, business travel, and regular customers alike. Key Success Factors Why would someone choose to join the car sharing service industry?
The answer is simple. It is cheap and convenient. Car sharing offers a long distance option in case public transportation or even cabs cannot get to where people want to go. This is also very useful to someone who does not like or want the hassle of owning a car, from paperwork to maintenance and repair. Also, it is convenient for those who are environmentally friendly and want to do their part in taking care of the planet. According to Zipcar, each Zipster takes approximately 15-20 personally owned vehicles off the road.
This is also ideal for families who do not have a second car and need to option of using a car for special occasions when their primary car is unavailable. Also car sharing is a good idea for “fashionistas” who temporarily want a want a cute car to match their shoes or any outfit. There are endless possibilities as to why one might choose to use this type of service but the bottom line is that is creates convenience and economic value, which are very important aspects in today’s economic recession. Environmental Analysis
The major environmental trend, which has already been discussed briefly, is the eco- friendly cars used in the car sharing industry. Reducing carbon emissions is a major goal for eco-friendly people in the world. According to Rob Spiegel’s article, “The Green Scene”, car sharing companies, such as, Zipcar have improved the environment through its university programs. University programs alone have reduced carbon emissions by nearly 56 million pounds annually, equivalent to the annual emission of 4,800 passenger vehicles. The car sharing industry offers something unique and personally usable to its consumers in these hard economic times.
People are downsizing often getting rid of their personal cars, which leads to a new potential market segment of car sharing users. In the past, many people enjoyed driving to work long distances with their radio turned up and their hair blowing in the wind. However, in today’s economic conditions people are car-pooling to work to save money. Car sharing comes into action. Car sharing would be beneficial to the co-workers who did not drive to work. They could run errands during their lunch break by participating in car sharing.
Other environmental factors that should be examined closely are potential threats. The car sharing industry could potentially be harmed with the expansion of public transportation. If the public transportation system grows the potential care sharing users could decrease due to the new wide range of drop and pick up locations and the cheapness of transportation. The car sharing industry has no control over the amount of money that is allocated to subways and streetcars, which are assets in the public transportation system. IV. 3C’s Analysis: Customer, Competitor And Company
Car sharing targets especially those who: cannot afford to buy a vehicle, who do not have the means to frequently rent form traditional agencies, who cannot park near home, who rely primarily on public transportation, who are Internet savvy, and those who are politically, socially, environmentally, and trend-conscious. ZipCar’s Target Market Segment Zipcar targets many geographic areas, including but not limited to areas with universities close by, such as, New Orleans. Zipcar would be able to target at the University of New Orleans located in the prime are of New Orleans more than 11,000 students and 2,000 faculty and staff members.
Zipcar would target males and females, as well as, national or international students alike. Zipcar also mandates that any member of their service must be the age of 18 or above. Also, the Zipcar service would be extremely beneficial to those who live on campus. The University of New Orleans houses approximately 1,556 students. On campus students would be a huge target group within the market segment of UNO for Zipcar to focus on. Another important group for the University of New Orleans to target is the technology savvy and eco- friendly advocates.
There is an I-phone application that enables Zipcar users to locate the car and allows them to schedule car use days and times. The phone application ability could be a huge selling point of Zipcar memberships. The application is easy to navigate and makes using the service easy and enjoyable. Those who are eco-friendly advocates would enjoy the car sharing service of Zipcar because the company uses low emission car in its fleet of cars. Students, faculty and staff who would be targeted would be the people who need to commute daily, go grocery shopping, travel to other parts of the city, run errands etc.
They want to use Zipcar as their car sharing service provider while benefiting from a quick and easy (no hassle) style of transportation. In order to fully evaluate Zipcar, one must take into consideration the strengths, weaknesses, opportunities, and threats facing the company. Appendix A exhibits factors in each category for evaluation. After taking into consideration all the aspects of Zipcar’s SWOT analysis, it is worth saying that Zipcar’s competitive advantage lies with being the leader in the market and by focusing solely on the car sharing aspect of the business for over 10 years.
Thus Zipcar’s business plan enhances Zipcar’s services and high customer satisfaction through spending more time on understanding the customer and his needs. Competition One of the major threats for Zipcar in the New Orleans area is their competition WeCar, a branch of Enterprise that is already located in the New Orleans uptown area at Tulane University and Loyola University of New Orleans. The two universities have jointly agreed to use WeCar as a means of car sharing transportation service for their students that are in need of a car and cannot or do not want to get their own means of transportation.
According to Loyola and Tulane officials, the two universities chose WeCar because Enterprise Corporation is known for their exceptional customer service and already established 5,000 traditional car rental branches in the United States. According to interviewed Loyola WeCar users, WeCar brought about endless destinations for users to venture to. Before the implementation of car sharing, most students living on campus were stuck exploring a limited geographic area. In order to fully evaluate WeCar, one must take into consideration the strengths, weaknesses, opportunities, and threats facing the company.
Appendix B exhibits factors in each category for evaluation. WeCar’s SWOT analysis shows that their major competitive advantages are that they already established in the New Orleans area and that they have an established customer bases as Enterprise Corporation. Numerous customers like to continue doing business with a corporation like Enterprise that they have done business with in the past, even if the company is experimenting with a products or service. Another possibility for WeCar is that the University of New Orleans will choose to sign a contract with WeCar over Zipcar because of word of mouth from Tulane and Loyola.
V. Marketing Goal and Objectives Our main goal is to expand Zipcar to the University of New Orleans in New Orleans, LA. Zipcar’s main focus right now is to work with the University of New Orleans to make it possible to provide services for students and faculty and staff in this new geographic area. Zipcar desires to implement this goal by the beginning of the Spring 2011 academic semester. After Zipcar accomplishes this initial goal of establishing itself at the University of New Orleans their focus has the potential to expand to the do different segment areas.
VI. Alternative Strategies We have considered three alternative strategies that we might be useful in helping us achieve our goal and help overcome the impediment of lack of car sharing concept understanding and brand recognition for Zipcar. In order to achieve the goal of expanding to the UNO area Zipcar must design an alterative strategy to overcome the impediments. The three strategies are classified as the following: A – Advertising, B – Public Relations, and C – Direct Marketing.
Even though all three of the alternative strategies are possible to conduct to increase concept and brand recognition, Zipcar believes that only one strategy will be most effective to the UNO community. A. Advertising The advertising strategy implies that Zipcar uses advertising as the means of bringing about more brand and concept recognition. Zipcar would distribute flyers on campus, create brochures and booklets, post display signs by RTA pick-ups, show short testimonial videos on TV’s around campus in the frequently visited buildings around campus, and place ads in the school newspaper.
This approach is quite aggressive and has the potential by getting Zipcar brand logo visually to people, but it also has some drawbacks. Zipcar knows that 10 to 1 students and faulty and staff will not even look at the flyers and/or brochures and booklets distributed. Potential customers most likely have thrown away the material before even glancing at it. B. Public Relations The second strategy implies that Zipcar use public relations as their means of bringing about more brand and concept recognition to achieve the goal by howing their presence. Zipcar would bring 2 or 3 car to campus for people to see and test (lobbying). It would be wise to involve UNO’s student organizations in promoting by allowing students to free of charge use the cars to transport helpers across town to participate in events, such as, Habitat for Humanity. Zipcar would encourage College Presidents to use the cars to transport staff to lunch on Zipcar’s dollar. These two public relations strategies would enable Zipcars to be seen throughout campus at all times.
Zipcar would like to write an article in the school newspaper to share testimonials and exhibit the company. Even after the implementation of this particular strategy, Zipcar’s work would not be done. Zipcar plans to attend different major campus activities, such as, International Night were approximately 800 people come to see the show, Zipcar would also make their presence known in places, such as, in the Privateer Place and in the Dorms (Pontchartrain Hall) , the library, and the University Center where most students come together.
The main drawback with this strategy is that there needs to be a lot of cooperation and communication between UNO representatives and the Zipcar Company. Also the strategy entails having staff available to promote Zipcar which can be very expensive. C. Direct Marketing The third and last strategy implies that Zipcar use Direct Marketing as their means of bringing about more brand and concept recognition to achieve the goal. The Direct Marketing strategy would be achieved via mass campus emails, mass text messaging, and direct mail to parents/students, faculty and staff.
The only downfall for this particular strategy is the possibility that many of the mass emails or texts would be erased before reading thus leaving Zipcar without a proper recognition or awareness of the service. Thus, without potential customers being aware of the services available, Zipcar would not be able to implement the service at UNO. Results In order for Zipcar to choose the best strategy out of the three, we have come up with five different criteria which would serve as a guide to determine which alternative strategy is the most effective strategy for overcoming the impediments and ultimately leading Zipcar to enter a new arket segment at the University of New Orleans. The five criteria used to evaluate the three alternative strategies were 1) Cost of implementation, 2) Potential Growth, 3) Ease of Implementation, 4) Credibility, and 5) Impact on Brand Awareness/Concept. Zipcar considered criteria 5 (Impact on Brand Awareness/Concept) to be the most important (importance weight 5) due to the implication of this outcome in terms of the goal. Credibility and Potential Growth are in second place with an importance weight of 4. How credible Zipcar comes across to consumers is very important.
Zipcar needs to express legitimacy in what they offer Potential growth plays a key role in how quickly and how much the new market segment will embrace Zipcar and purchase a membership. Cost of Implementation as well as Ease of Implementation received a 3 in terms of weighted importance due to the fact that it would be important on how much it would be to implement the strategy or how easily Zipcar would be able to implement the strategy, but they are not as important as how the strategy would create awareness quickly and efficiently.
After evaluating the strategies using the above criteria we created the evaluation table (see Appendix C), which shows that out of the three potential strategies, the best alternative strategy for Zipcar to implement is strategy B, Public Relations. Justification Public relations is the most suitable strategy for Zipcar because it encompasses an element of presence. History shows that people are better persuaded to try something new by constantly being visually reminded about a product or service.
If UNO students, faculty and staff start seeing their peers using the Zipcar around campus and across town they will also want to use it and become a Zipster. Involving student organizations and supporting luncheons with college presidents will help get people who have already experienced the Zipcar service continue to use the easy and convenient service. Once people use they service they will become hooked and join. This strategy will be able to show consumers that the information given out and discussed about Zipcar is creditable by physically having representatives on campus to talk to.
Even though the public relations strategy may be costly to implement, it is the best strategy to reach the UNO market segment. VII. Implementation Plans The first step to implement Zipcar’s marketing plan is to come to an agreement with the University of New Orleans to join forces in providing car sharing services to the univeristy’s students, faculty and staff. It is important to keep in mind the benefits from UNO’s standpoint. Zipcar will help increase UNO awareness around the country and in the New Orleans area. With UNO as market segment, the amount of Zipsters in the United States will increase.
See Appendix D to view the already established geographic distribution. People will know the map and see that the University of New Orleans is innovative and looking out for the good of their students and faculty and staff. Also, another major benefit for the university is that the implementation of Zipcar could attract potential students this increasing enrollment, which in return increases revenues. Once Zipcar has acceptance they will start implementing our schedule. Zipcar Company will meet with UNO in mid July 2010 to get approval and in early August 2010 Zipcar will get approval and design UNO’s and Zipcar’s marketing teams.
Between September and December 2010 Zipcar will target Student Organizations and Student Activities. Zipcar will attend “Get to know UNO” – the equivalent of Open House where new students are targeted as well in October 2010. This is really an advantage for both Zipcar and UNO to target new students. UNO will get more students interested in attending this University due to the high quality services offered and Zipcar could get more potential customers. In December 2010, Zipcar would showcase an article in the university’s newspaper promoting the release of Zipcar on campus in January 2011.
Finally, in January 2011 Zipcar will be launched on the UNO campus and a celebration party will take place to toast the implementation. As we mentioned earlier once Zipcar is launched on UNO’s campus Zipcar will not stop promoting their service. An option to increase potential growth would be to attend International Night in March 2011, one of the biggest events on UNO’s campus with approximately 800 people attending. Zipcar could possibly sponsor the event, as well as, help the student organization in charge of the event get around town by using Zipcar.
Most of the people attending International Night are international students who are less likely to invest in a car due to the short period of time they spend in the US, thus making them a good target for Zipcar. Zipcar would also continue to promote Zipcar in places, such as, the University Center, the library, Privateer Place and the Dorms (Pontchartrain Halls). It seems like there are roughly 740 students currently living in the Pontchartrain Dorms and 816 students living in Privateer Place most of which might again not have a means of getting around thus making them an important target for the company as well.
As with most products and services there comes a cost. The major amount of cost for Zipcar Company to achieve its goal of entering a new market segment on UNO’s campus would be promoting the service using the public relations strategy. During the promotions strategy scheduled before Zipcar is implemented in January 2011, is when most costs are occurred. During this time, people are using the cars for free, thus costing Zipcar gas, insurance, and maintenance fees when no membership revenue is collected at UNO.
Also, it is expensive to have paid employees on UNO’s campus promoting the service. From the university’s standpoint, the only major cost for the university to implement Zipcar is the 2 to 3 parking spots Zipcar requires the university to give them to house the cars. Also, due to the fact that UNO will co-market the public relations with Zipcar, there will be materials used in promotion costs and there will also be a nominal cost for staffing whose normal tasks are pushed aside to immediately work on promoting Zipcar. VIII. Evaluation and Control
The best way of evaluating our achievements is by measuring its success of entering the new University of New Orleans market by the number of Zipsters on campus. The potential market segment growth on UNO’s campus is undeterminable. But, it is essential that UNO and Zipcar continue to promote the service because once someone is a Zipster they will most likely always be a Zipster. The Zipcar Company has the potential to grow into other market segments by achieving the company’s current goal of expanding to UNO’s market segment by retaining customers after graduation.
We believe Zipcar used a Blue Ocean strategy to improve transportation for those in need of an alternative option other than owning a car or using their personal car at all times. Zipcar SWOT Analysis Strength •Ease of use •Cost efficient •Reliable •Customer centric vision •Eco-FriendlyWeakness •Lack of brand recognition in the New Orleans area •High dependency on technology •Decentralized management Opportunity •Growing demand for car sharing •Retaining student after graduation •Gain perception(attitude/behavior)Threats •Raising fuel cost •Competitors adopting car sharing concept.
Evaluation Matrix ImportanceAdvertisingPublic relationDirect marketing Cost of Implementation3452 Potential Growth4343 Ease of Implementation3235 Credibility4352 Impact on brand awareness5341 Total578046 Implementation Schedule July 2010Meet with UNO officials – informative session August 2010Get approval and designate the marketing team Sep-Dec 2010Implement the marketing plan-target student organizations, open-house etc December 2010Announcement in the UNO newspaper January 2010Grand inauguration- launching the service at the UNO campus Car sharing centers in the U. S References:
Kirsner, Scott. “Warning to Zipcar: Traffic Ahead. ” The Boston Globe. 30 March 2008. July18. 2010. Grocer, Steven. “The 411 on the Zipcar IPO. ” The Wall Street Journal. June 2010. July 15. 2010. Keegan, Paul. “Zipcar- The best new idea in business. ” CNNMoney. com. 27 August 2009, July18. 2010. Addison, John. “Carsharing Competition:Hertz Chases Zipcar. ” Gas 2. 0. 19 December 2008. July 19. 2010. Trejos, Nancy. “Recession Lesson:Share and Swap Replaces Grab and Buy. ” Washington Post. 17 July 2009. July 20. 2010. “Where can I find car sharing? ” Carsharing. net. July 18. 2010