Proposed Market Research for Famuss car Rental - Essay Example

? Proposed Market Research for Famus’s car Rental Table of Contents Introduction 4 Discussion 4 The Trends in the Overall Market 4 Market Segment 5 Positioning 6 Method of Market Research 9 Type of Advertisement 10 Pricing Strategy 11 Long Term and Short Term Goals 11 Conclusion 11 Recommendation 12 Testing the Propositions 12 References 14 Appendix: Interview Questions 16 Introduction Car rental is a major industry in the transport sector. Car rental companies rent cars for short periods of time ranging from few hours to a few weeks in exchange for fee charged. Such car rental companies have branches situated across the countries and they are primarily located near busy city areas or near airports. In 2009 Car rental industry, took a major plunge due to economic recession. But they slowly emerged out from recession and in 2012 and 2013 this industry looked very positive and they started to gain profit. With the growth in the tourism industry the growth of car rental agencies has risen (Henry, 2008, p.57). The travellers have the liberty to move around freely with such rental cars. A growing number of air travellers had led to the increase in revenue of the car rental agencies around the world. Discussion The Trends in the Overall Market The car rental industry is a major part of the transport industry. It is affected by various factors like increase in the GDP growth which in turns results in increase in the number of air travellers. 45 to 50 Millions of vehicles are rented all across the Europe. The importance of car rental industry can be seen from the growth of major car rental companies like Enterprise Rent a car and National Car Rental. For example UK’s largest car rental company National Car Rental has a fleet base of over 40,000 vehicles and 170 branches all over. Both of the above mentioned companies have received prestigious ITM awards and have made notable contributions in the sector (Vogel, 2012, p. 124). The global Car rental industry is now facing radical transformations. Some year ago most of the major car rental companies of US were owned by the car manufacturers (Lee, 2013, p. 1). Now only Ford has their own car rental business named Hertz. But apart from that most of the other large car rental companies are owned by individual companies who are only into car rental business. Few examples are Alamo Rent a Car and National Car Rental are owned by Taylor family of St. Louis; Budget and Ryder is owned by Sandy Miller who is a former franchisee. These players along with a few others control over 90 per cent of the market (Autoescape. 2013, p. 12). Here are some of the facts of car rental industry of US in 2012 It employed over 126,000 in US The Total revenue grew from $31.6 billion in 2007 to $33.7 billion in 2012, which shows that the industry is rising. Demand of car rental companies increased throughout 2012 as the air travel cost increased. The revenue is expected to grow from 5.6% in 2012 to 3.0% in 2013. The number of foreign tourist which visited the US had increased by 3.4% for the past five years to 2012. Market Segment Famus Car Rental intends to target basically two markets. The market of the company is segmented into two parts the luxury car segment as well as the economy segment. The company thinks that the luxury cars would be the suitable in case of the special occasions (McDonald and Hawkins, 2013, p. 15). The people may hire the luxury cars during the weddings or various events. On the other hand the economy cars would be hired on the day to day basis for the regular requirements of the individuals. The market for the high end customers would be comparatively niche because the rental costs of the cars would be more. On the other hand the rental costs of the cars would be less for the economy sections. The luxury cars would also be taken by the business travellers. The business travellers would not hesitate to pay the high price for the cars. On the other hand the event management companies would also be an ideal target market for the luxury cars. The competition in this segment would be high since the demand from the various corporations and businesses would be high for the luxury cars (Kock, 2006, pp. 45-59). On the other hand the economy cars would gain popularity among the households and the office goers of the city. These cars especially in the economy segment have to be present on a twenty four hour basis and the emergency cab facilities should be available. This would make the company popular as the emergency cab service company. Positioning Pest Analysis Political Economy Social Technological Environmental Legal The political situation of a country acts as the contributor in demand for car rents. A fair political situation will allow consumers to move out for a weekend drive and so they knock the door of car rental companies. The economic growth of the nation and demand for car rentals are correlated. Economic growth and rise in disposable income will call for more car hires. The social factors like income level, status of the customers, population of the country will contribute in the success of the company. A growing economy with increase in the rise of income levels will be a blessing for the car rental companies. Technological factors like comfortable driving, fuel efficient engines for cars are all contributors for the success of the business. The economy car segment has to position their car services basically for the emergency Car services. The time of the day during which the services would be provided would not remain confined to the day but also through the night. The families and businesses may go for a long drive or may travel long distances. For that the sports utility vehicles would be more compatible for the travellers. The luxury car segment has to be advertised in the premises of the luxury hotels or the stores that would sell the luxury goods. The travellers who come to these luxury hotels or would go to the luxury stores for buying souvenirs and they would have awareness about the company. A peaceful environment will act as the catalyst in raising the demand for car rentals. Although regulations on pollution imposed on car driving may be a hindrance. The car rentals companies will have to maintain their cars efficiently so that the pollution level remains below the regulated level. The car rentals have to follow the rules and regulations of the environmental pilices and then set their price accordingly. The luxury car segments can also be positioned with schools and the colleges which would be using the services for the pick-up and drop of the students to the institutes as well as for educational tours and excursions (Seth, 2006, pp. 21-34). The economy car segment positions in the railway stations, bus terminals as well as the airports where there is a continuous flow of the tourists and travellers coming to the city. Famus Car Rental would also position as the service provider for the hospitals and the clinics for the ambulance services. Method of Market Research It is important for the Famus’s Car Rental Company to conduct an effective market research in order to determine the basic principles and values of several positive incidents that are happening within the industry and global market places. There are two types of research methods, such as qualitative and quantitative research method (Ghauri and Gronhaug, 2005, p.79). Qualitative research method generally focuses on the evaluation and analysis based on the feelings, meanings and emotions of people. On the other hand, quantitative research method used to deal with numerical data and information set. Generally the research processes are adopted based on the nature of the research work. This study will deal with the views, attitudes and expression of the people. Based on the exploratory nature of the research, qualitative research method has been adopted in this study (Pickton and Broderick, 2005, p.91). Moreover, there are different approaches in a qualitative research method, such as language orientated, theory building and interpretative approach. This research work needs to be completed depending upon the interpretative approach. Therefore, open ended interview questionnaire process has been selected for this research. There are two types of data collection process, such as primary and secondary data collection process. Secondary data collection process can be defined as the collection of data from several recorded academic database, such as journals, text books (Yin, 2004, p.29). On the other hand, primary data collection process can be defined as the collection of data from a live and real field work. Both these data collection process has different advantages (Saqunders, Lewis and Thornhill, 2003, p.51). A research can get up-to-date live data through primary research and can get large set of data through secondary data collection process. Both the data collection process has been considered in this study depending upon the advantages. In terms of sampling, the organization should consider a sample size of 10. 5 business executives, 3 households and 2 young university students can be chosen as the participants in the interview process. Type of Advertisement It is important for Famus’s Car Rental Company to consider the responses or answers of each and every respondent or participants. It is important for the organization to adopt effective promotional and advertising tolls based on the demand and responses of the participants as it will help the organization to determine the trend of entire market. Number of internet and social media users are increasing significantly. Therefore, it is important to consider the online promotional strategy (Burrow, 2011, p.48). It is highly important for the organization to consider the other promotional strategies, such as digital and print media strategies. Pricing Strategy It is important for Famus’s Car Rental to consider different pricing strategy based on the different segment of cars and income status of different people. The organization should implement economic pricing strategy for the people of middle class income group. Therefore, the organization needs to keep different segments of car. On the other hand, people should implement premium pricing for the luxurious cars (Belch and Michael, 2005, p.62). In addition to this, the organization should consider payment and booking options. They need to determine these strategies based on the responses of the participants. Long Term and Short Term Goals Long Term Goals Maintaining business sustainability and effective stakeholder relationship. High market share among all the competitors based on the effective client service. Short Term Goals Developing a potential customer base through effective promotional strategy within 6 months of business operation. Break even within 2 years of business operation. Conclusion It is clear from the above discussion that the car rental industry is highly competitive. Famus’s Car Rental Industry is trying to provide effective customer services to the business clients and customers. They will provide service of both luxurious and economic cars depending upon the income segment and needs of people. The organization will conduct a market research to determine the need and demand of the customers. It is important to conduct both primary and secondary data collection process as it has been identified from research methodology that the advantages of both primary and secondary data collection method will help the organization to gain a positive research outcome. Following recommendation plan will help the organization to improve its market research activities. Recommendation It is clear from above discussion that the organization adopted an interview method in order to determine the needs of target customers. In addition to this, the organization has adopted secondary and primary data collection method. The organization can implement a survey method along with the interview method under the primary data collection method. The survey method will help the organization to gather data from a large range of area. This will help the organization to develop effective long term strategy. In addition to this, pricing research, measuring attitudes and fact gathering from a large area within a survey or census method will help to create effective marketing and business operation strategies. It is true that significance of online business is increasing significantly (Hormozi, Sutton, McMinn and Lucio, 2002, pp.755-763). Appropriate survey method will help the organization to implement effective business strategy. Testing the Propositions Marketing research is an important business operation tool that helps an organization to determine the nature of market and the prosperity of a product or service in a particular market place determining the needs of consumers. According to Kothari (2004), market research is an important function that helps an organization to collect information and source that can enhance effective decision making process (Kothari, 2004, p.108). The author stated that the primary data collection method has huge significance as it helps the organization to conduct a real time and field survey process. There are several data collection methods under primary data collection process. This data collection process can help a company to develop business strategy according to the views and feelings of participates in a data collection method. However, several writers opposed that the primary data collection method is more valuable than secondary data collection method. According to Saunders (2003), secondary data collection method helps an organization to gather a bunch of effective data and information within a quick period of time. According to the author, adoption of primary data collection method is time consuming. Therefore only the secondary data collection method needs to be considered by the organization. It is true that both the data collection process has several advantages and significances (Saunders, 2003, p.207). Keeping these things in mind, it can be concluded that the implementation of both primary and secondary data collection process will be effective for Famus’s Car Rental. References Autoescape. 2013. France, the second market of global car rental industry. Retrieved from: http://www.autoescape.co.uk/cheap-car-hire-short-term. [Accessed on: 4 December 2013] Belch, G., and Michael, G., 2005. Advertising &Promotion-An Integrated marketing Communications Perspective. New York: McGraw-Hill. Burrow, J., 2011. Marketing. Stamford: Cengage Learning. Ghauri, P., and Gronhaug, K., 2005. Research Methods in Business Studies. London: Prentice Hall. Henry, A., 2008. Understanding Strategic Management. London: Oxford University Press. Hormozi, A., Sutton, G., McMinn, R., and Lucio, W., 2002. Business Plans for new or Small Business: Paving the path to Success. Management Decision, 40(8), pp. 755-763. Kock, N. 2006. Systems Analysis & Design Fundamentals: A Business Process Redesign Approach. New York: Sage. Kothari, C., 2004. Research Methodology: Methods and Techniques. New Delhi: New Age International. Lee, D. 2013. Global Car Rental Market. Retrieved from: http://www.academia.edu/4100095/Global_Car_Rental_Market. [Accessed on: 4 December 2013]. McDonald, S. and Hawkins, D. 2013. Enterprise and Entrepreneurial Management. Retrieved from: http://www.ftms.edu.my/pdf/Download/UndergraduateStudent/MOD%20003477-lecture%205.pdf [Accessed on: 4 December 2013]. Pickton, D., and Broderick, A., 2005. Integrated marketing communications. London: Prentice Hall. Saunders, M., 2003. Research Methods for Business Students. New Jersey: Pearson. Saunders, M., Lewis, P., and Thornhill, A., 2003. Research Methods for Business Students. London: Prentice Hall. Seth, P.N. 2006. Successful Tourism: Volume II: Tourism Practices. New Delhi: Sterling Publishers Pvt. Ltd. Vogel, H.L. 2012. Travel Industry Economics: A Guide for Financial Analysis. Cambridge: Cambridge University Press. Yin, R. K., 2004, Case Study Research, Design and Methods. London: Sage Publications. Appendix: Interview Questions Name: Age: Nationality: Income: 1. What should be the Process of Booking of cars? 2. What advertising tools need to be adopted to increase the awareness? 3. What amenities should be provided in car? 4. How the pricing strategy should be considered? 5. What would be the preferable mode of payment? Read More