Internship Report - Agency operator - Essay Example

? Internship Report - Agency operator Executive Summary Auto Rental services all across the world is a very lucrative business opportunity as it always caters to the basic needs of conveyance for a human being. The scenario and margin for doing this business in different countries across various locations is highly different in different cases as there are various kinds of diversified macro and micro economic factors as well as socio political factors that comes into play. This paper highlights the focus on a new area of UK, where there is no activity for AVIS auto rental. Further into the paper, it discusses the product design which will be useful to cater to the needs of the consumers of Oxford Street and generate revenues for the company. It then proceeds to focus on focus on the basic 4P’s of marketing – Product, Place, Promotion and Price. An effective pricing is very important in this case. There are multiple numbers of competitors that are buzzing around in UK, and have the potential to pick the same spot as a battlefield. So fixing a highly competitive and affordable price to occupy the share of minds amongst the consumers and high brand recall is very brilliant. The paper, further down the line, also focuses on ways and means to market the route and location of the service in order to make the consumers aware of its offerings. It also brings into focus the possible staffing of employees to maintain an efficient manpower base. And finally, it also discusses the operational details and aspects that are required and considered vital for the efficient delivery of the product. Contents Executive Summary 2 Market Overview 4 About the Company 4 Designing of the Product 5 Marketing Strategy 5 Product 5 Place 5 Promotion 6 Price 7 Product Sales 7 Customer Service 7 Staffing 8 Business Operations 8 References 10 Market Overview The auto rental market is basically comprised of two main segments. The first segment is the auto rental segment, which provides rental services for luxury cars and sedans to high income group consumers and also caters to the demand for middle class consumers. The other segment is the truck rental segment which is catering to the demand of movement of freights over the roadways and has a target group of mostly businesses and some standalone one time individual customer. Car Rental is a very profitable and popular business in the UK and western markets, as people with increasingly high disposable income and the ability to purchases the rental services are growing in number every year. The car rental industry is basically categorized on the basis of either location or by the type of customer availing the service (Researchandmarkets, 2010). The recent times have been a little challenging for the business of car rental in the UK. As per reports by various UK based market research agencies, the car rental industry suffered a setback during the year 2009 and the setback continued till then. The reason being is simple. Ever since the global economy went into a credit crunch, which was triggered by the collapse of the famed Lehmann Brothers, the spending on rental services worldwide took a hit. As a part of the picture, UK’s car rental agencies also suffered to some extent during that time. Around the year 2009, people all over the globe preferred to check their spending habits and preferred to save their finances instead of spending and splurging by going on holidays, tours or romantic getaways to foreign countries. This change in global consumer behavior shrank the profit margin for the car rental companies as there has been a significant decline in the amount of revenue that was being generated by providing rental services to the middle class tourists coming from various locations across the globe. Also, the recent slowdown due to the Euro crisis in the west has also brought in a significant change in customer’s preference. The customers whether organizational or private individual are looking for cost effective and flexibility in services provided (The Institute of Transport Management, 2010). The car rental service providers opted to tackle the economic slowdown by going for attractive pricing policies and extensive marketing of their routes and services they are providing. As of December 2011, the UK truck industry was generating revenue of 2 billion pounds. The truck rental industry also took a hit due to slowing down of the UK as well as the global economy. During the previous slowdown of 2008 as well as during the Euro crisis, there was a significant fall in the amount of freight movement that was happening all across the country. This triggered a slowdown in the leasing and rental of the trucks. The truck rental agencies tried to tackle the problem of the macroeconomic nature by trying to keep up with the fall in demand by reducing fixed costs and opting for leasing of trucks rather than acquiring them in a full time manner (IBISWorld, 2012). About the Company The company AVIS Car Rental is a highly reputed car rental brand and has its presence in over 114 countries. It is into providing of auto rental services to the customers all around the globe. The focus point for this case study is mainly the UK location. The company has multiple lines of operation in order to cater to the needs of the consumers all across the country. The company mainly handles 3 separate lines. The first line is the car rental service, provides by AVIS and is targeted to mainly the high income group consumers. They try to cater to the commercial as well as leisure segment of the premium consumers and they try to service these consumer segments by offering high class sedans or luxury vehicles. The second line is also a subdivision of AVIS, named Budget which provides car rental service which is targeted mostly towards the price sensitive and value conscious middle class consumers in order to tap the growing demand arising out of the rise in middle class all over the world. The third line is the operational line of truck rental services provided by AVIS sub division, Budget and is catering to the movement of freight for small and medium enterprises as well as big corporations. For all the car rental services, AVIS car rental provides a variety of services which includes providing services to customers with or without chauffer facilities (Avis, 2012). Designing of the Product The location that is being chosen for designing the product as well as for popularizing the services offered by Avis is Oxford Street, which is the busiest street in London. This location is not a part of any major airport operation. The service design is simple. The services offered by Avis for this particular location will comprise mostly of all the operational lines offered and handled by Avis and Budget. The reason behind this is Oxford Street is one of the busiest streets in UK and is a huge shopping destination. Assuming that the shopping destination is frequented by not only by local population of UK but also by tourists coming from abroad, there will be a huge demand for both luxury cars and sedans to cater to the upper class and elite class of tourist as well as the cost effective car service provided by Budget to cater to the needs and demands of the middle class consumers at large. Also the truck rental service will be very much in demand in this area. The reason being, Oxford Street is one of the busiest shopping streets in UK, and as result of that, a huge lot of merchandises are being sold through the outlets. To replenish the emptied stock, there will be a lot of demand for movement of goods and merchandises from the warehouses to the shop outlets. And the truck rental service can easily fit in and cater to the high demand of the movement of goods and products to the retail outlets. Marketing Strategy Product The product is offering of rental services of cars as well as trucks to the tourists and retail outlets of the Oxford Street in UK. The cars will be provided to the tourists with the option of having or not having a chauffeur. Also, there will be various segments of Avis and Budget cars like the luxury cars and sedans, the cost effective cars and trucks that will be on use to cater to this booming and high opportunity market. For the sake of convenience of the customers for availing the rental services of Avis, there will be provision for opting to take the car directly from the premises of Avis, or having the car delivered to the customer’s premises. Place The place of operations is mainly the location of Oxford Street in UK and its adjoining areas as per customer’s convenience. The circle of movement for the rental vehicles is expected to be within 600 miles, calculated by taking Oxford Street as the centre. Promotion Avis and Budget both have brand recognition among the consumers of UK as well as in other countries. They have been recognized as a top notch service provider for auto rental services in some of the major locations in the west. Their superior service quality for auto rental services has provided them wide recognition and recall in the open market amongst the consumers and has provided them in a very advantageous position as compared to other competitors in the market. The promotion for the service that is going to be provided from the new location of UK, from Oxford Street, should be in line with the company’s brand image, beliefs, mission, vision and values. So a proper communication of the brand is very essential. Since the focus of service of the new route is mostly towards the tourists as well as shoppers from the local population, who go down to visit and buy merchandises from the busy shopping street of London, the primary target audience for the promotion campaign is actually the shoppers and the tourists of foreign countries. Normally, there is a high probability of the overlapping of these two segments, just because it can so happen that a shopper can be a tourist or a tourist may not be a shopper. But, either ways, it is not going to hamper the business of the car rental company, because the main service that is being provided to either a tourist or a shopper is the convenience of movement. The secondary target audience will be basically the retail outlets that are located in the Oxford Street and who needs a mode of convenient transport system for smooth delivery of the high demand merchandises that is required more or less on a daily basis or even in some case on hourly basis also. In an effort of promotion to attract and lure in the primary target audience to avail the services, the promotion should be done in a very methodical manner. Both the tourists and the shoppers has an overlapping of the category of middle class and rich class and may have very different preference when it comes to availing the services of Avis. For Avis to target the high income group tourists and shoppers, they should try to position the brand in the high profile segment by showcasing their luxury car segments in the ads. This can be done by giving print advertisements in various high class costly fashion and style magazines which basically has a target group which comprises of mainly the rich and elite class consumers. They can even try to promote the brand as a high profile one by organizing some kind of high profile lifestyle and fashion event or parties which are frequented by mostly the rich and high income group people. For Avis to target the middle class tourists and shoppers, they can promote the brand in multiple ways. As a perfect strategic play, they should highlight the cost effective car rental services to attract and lure in customers, who will be mostly tourists and shoppers and will have a purchasing power equivalent to the middle class segment consumers. The most common way is to give print media ads in various shopping magazines and tour guides. This will increase the circle of influence of the ads and will communicate the presence of the brand amongst the middle class tourists and event the shoppers. Promoting Avis’s new location of operation in in-flight magazines of international flights can also be a very effective way to communicate the brand’s presence among tourists as Oxford Street is a very famous shopping and tourist destination in UK and tourists don’t prefer to give the location a miss. So it will increase Avis’s exposure of working from this new location to the masses of foreign countries as well. Avis can also opt to distribute discount coupons to shoppers at the Oxford Street, by tying up or collaborating with some of the retail outlets which have high footfalls and attracts tourists and shoppers of mostly middle class segment. And finally for the truck rental service, Avis should target the large number of retail outlets that are doing business in the Oxford Street Area. Avis should try to capture this segment of transporting goods and merchandises to the retail outlets by promoting their delivery truck rentals. The best way to promote the service for this segment is by offering volume discounts and competitive price on the movement of merchandises and items. Price Due to the effect of the global slowdown since the collapse of Lehmann Brothers, both organizational as well as individual customers are looking for highly cost effective services that will help them to manage their expenses. So, price determination is the trickiest part in this business as it may enhance or damage the reputation for the entire brand image of Avis. So, the pricing for the services has to be in direct relevance with the value provided to the customers. For the high income group segments, which will be availing the luxury cars and sedans, the pricing should be a little high, and that has to be made by offering the service bundled with an augmented product in order to make the rich consumers believe that they are getting value for money. For the middle class segment, the pricing should be reasonable enough so that they can afford it. And for this, they will be provided only the service of auto rental without any added facilities. For the truck rental service, Avis should be providing discounts on the basis of volume movements. Product Sales The sales are supposed to pick up for the rental services for the new location of Oxford Street, once the promotional campaign attains some amount of success. Also, it is expected that consumers from all the segments is going to have the feeling of getting value for money. Because of the bundling of rental service along with the basic product to the high income groups, it is expected that the bundled product offering will appeal to them. For the middle income groups, it is expected that they are going to get value for money through the reasonable pricing that is offered. And for the retailers of the region, it is expected that they will avail the rental service because of the competitive discounts that are being offered. Customer Service The success to this business lies in efficient customer service. As a matter of fact, a dedicated customer care helpline is very essential to handle the operations in a smooth and efficient manner. The customer care helpline can provide a large number of advantages to the customers and thereby benefit the operations of the business and significantly contributing to the growth. By highlighting the customer care number in their promotional ads, Avis can attract and lure in customer by giving them the benefit of placing the entire order just over the phone. Besides having an online booking system, people who are on the move mainly shoppers and tourists can avail the service at a hurry simply by dialing the customer care number. This will lead to a huge generation of business from the target segment and that too from the Oxford street and its adjoining areas. Also, another very vital factor is that having an online customer care number can help the tour operator to serve the customers better. Since, the service that are being provided in this case, involves the option of customers preferring to take chauffeurs on an optional basis, the customer care will help the customers to ask for direction or for alternative new routes, when stuck in an unfavorable situation. This will help to generate a large deal of customer satisfaction by providing a great deal of convenience to the customers through efficient customer service. Finally, the customers can also use the customer helpline to complain about the efficiency in service that might pop up in some cases from time to time. By solving the customer grievances, the operator can increase the reputation of handling customer grievance and can cater to the growth of the brand recognition of the Avis Auto Rental. Staffing The staffing for the business operations will comprise of mostly chauffeurs on a temporary basis, who are working on a third party pay roll. That will help to reduce the fixed costs for handling the service as the demand for chauffeurs is variable in nature. A significant part of the employee base will comprise of chauffeurs, who are hired on third party pay rolls. Also, a significant amount of maintenance staff that will be on the company’s direct payrolls will also be needed for the maintenance and refueling of the vehicles. This mixed model of employee staffing will lead to an increase in average revenue on a per employee basis. Since this is a business where a minimum number of chauffeurs has to be on a standby position and operate on a 24 hour basis, there has to be a working shift for the chauffeurs. The best way to manage the shifting requirements is to split up the working hours for a chauffeur on an 8 hour basis. So, in total, there will be 3 working shifts for chauffeurs. The maintenance staff is also needed on a regular basis. So it is better to split up their working hours on 12 hour shifts. Business Operations Oxford Street is a very busy shopping area and a highly frequented tourist spot of London. The business operations for offering Avis rental services on this route and destination has to be in tally with the opening hours of the stores located on that particular areas as well as the operational hours of the entire area. This will help to manage the supply and demand flow of the consumers to and from this area. Categorically speaking, the supply and demand can be evenly distributed and properly managed to optimum level by identifying the direction and flow of customers by following simple logic. The store opening hours for Monday – Saturday is normally around 9.00 A.M. The store opening hour for Sunday is 12.00 P.M. The store hours are however, variable. The stores on the Oxford Street remain open till 8.00 P.M on most of the days. For Thursday, the store hours are till 9.00 P.M. For Saturday and Sunday, the store hours are till 7.00 P.M and 6.00 P.M respectively (Oxford Street, 2011). It can be assumed that during the store opening hours for the stores located on the Oxford Street, there will be a lot of flow of tourists and shoppers to the location of Oxford Street. So naturally at this time, there will be an inflow of shoppers and tourists towards Oxford Street. It can be assumed that the customers who will be availing the services of auto car rental will be placing their orders at least 2 hours earlier. So, the rental service has to operate on 24*7 basis. Also, the cars as demanded by the customers have to be provided to their location of convenience with or without a chauffeur. During the store closing hours, it is expected that the flow of traffic will be mostly outward. So during the store closing hours, the operations should be mostly outward centric in order to gain maximum revenue by servicing maximum number of customers. On a rough note, it is estimated that for conducting operation on the Oxford Street location, a total of 20 Luxury cars and sedans, 40 cost effective cars is required to service the large number of shoppers and tourist frequenting the area. Also, to cater to the merchandise transport need of the retail outlets located on Oxford Street, it is expected that a fleet of 30 vans is needed. The 30 vans should comprise of 10 vans with a payload of 710 kgs, 10 vans with a payload of 1028 kgs and another 10 vans with a payload of above 1500 kgs (Budget, 2012). A fleet comprising of a highly diversified category and group of vehicles will help to cater to the needs and demands of the customers of the Oxford Street in a highly efficient manner. The cars and the trucks has to fully filled with fuel, so that no inconvenience happens to the customers as per their orders placed, or no uncomfortable situations arise relating to the providing of service to the customers. It is convenient for the cars and trucks, which has been returned by the customers at the end of the day, to go for refueling to the nearest gas stations during the late hours of the night, as there will be very little traffic flow and congestion for filling up gas at the late hours of the night at the gas stations. For the truck rental operations, it is expected that most of the retailers of the Oxford Street will feel it convenient to replenish their stocks after the closing hours of a full fledged shopping day. So, in an effort to replenish their stocks, they will be availing the trucking services during the end of the day or mostly mid days. Also, they will have the need to move their merchandises from the warehouses to the shop outlets. So the trucking operations will be at pick during the mid day and during the closing hours when the shopping as well as the tourist crowd starts to slim down. References Researchandmarkets. (2010). Global Car Rental Market Report: 2010 Edition. Retrieved from http://www.researchandmarkets.com/reports/1370480/global_car_rental_market_report_2010_edition The Institute of Transport Management. (2010). Europcar wins 'UK Car Rental Company 2010’ Award. Retrieved from http://www.itmworld.com/newswire_detail.php?iResearchId=10538 IBISWorld. (2012). Renting and Leasing of Trucks in the UK: Market Research Report. Retrieved from http://www.ibisworld.co.uk/market-research/renting-and-leasing-of-trucks.html Avis. (2012). About Avis. Retrieved from http://www.avis.co.uk/AboutAvis Oxford Street. (2011). Opening Times. Retrieved from http://www.oxfordstreet.co.uk/visitor-information/visitor-information/ Budget. (2012). Van Guide. Retrieved from http://www.budget.co.uk/budgetonline/gb/budget.nsf/c/Van_hire,Van_Guide Read More