The Car Rental in Auckland - SWOT Analysis, Marketing Strategy, and Marketing Mix - Example

Title: The Car Rental (NZ Car Rental) In Auckland Business Plan Student Name: Signature: Supervisors Name: Signature: Due Date: Table of Contents Executive summary 2 1.0 Introduction 3 1.1 Company Description 3 1.2 Business Mission 4 2.0 Situational Analysis 4 2.1 Economic Factors 5 2.2 Social factors 5 2.3 Technological factors 5 2.4 Legal factors 6 3.0 SWOT Analysis 6 3.1 Strengths 6 3.2 Opportunities 7 3.3 Threat 7 4.0 Marketing Strategy 7 4.1 Target Market strategy/marketing objectives 8 5.0 Marketing Mix 9 5.1 Product 9 5.2 Price 9 5.3 Place 9 5.4 Promotion 10 6.0 Implementation, Evaluation and Control 10 7.0 Conclusion and Recommendations 10 8.0 Financial Analysis 12 Executive summary Research reveals that modern businesses strive to increase there market share and The New Zealand Car Rental Company is not exceptional from such objective. It is for this reason that the company has to analyze the political, economic, social and legal factors before embarking on marketing strategies such as market segmentations. Because of changing business environment brought about by intense competition in the transport sector of the tourism industry, it will be an ideal situation for the company to constantly evaluate and examine its market competitiveness in terms of the products and services it offers to the market; under these case car rentals. Therefore, New Zealand Car Rental Company has the duty to critically analyze any existing strengths, weaknesses, opportunities and threats that might affect the company’s profitability in long term. Marketing managers should embrace the concept of all inclusive decision making process in order to formulate viable and marketing strategies that will boost the competitive edge of the company over its rival firms. The company can only cope with such changing business environment if it constantly carries out research in the market. It should be noted that no matter how attractive an opportunity can be New Zealand Car Rental Company cannot fully utilize it if it does not have the distinct competencies to handle it. 1.0 Introduction From past research, the most important purpose of any company is to maximize proceeds with an intention of yielding the most excellent probable returns to the shareholders for their funds that they had invested in the business. Therefore, to attain such an intention, business should be successful and resourceful in their production processes. Firms are increasingly faced with many challenges as a result of changing business environments which has brought about competition among various firms. In order for firms to cope with such competition brought as a result of rivalry in the market, the respective management has to formulate suitable marketing plans that will enhance their survival and continuity in their businesses (Bagley and Savage, 2006). This study will therefore focus on New Zealand Car Rental Company which is in the transport sector in the tourism industry and it is to be perceived to be among the market leaders of the tourism industry. New Zealand Car Rental Company also faces competition from other world-class car rental companies such as the Ace Rental Cars, Apex Car Rentals, Apollo Car Rentals, Auckland Car Rentals, and Auckland Rental Cars among others 1.1 Company Description The New Zealand Car Rental Company will be regarded as one of the car rental service companies in the transport sector of the tourism industry in New Zealand. The company’s location will be in Auckland, New Zealand whose headquarter will be near the Auckland International Airport. The company will be put in a position of providing different varieties of vehicles depending on the preference and the affordability of its consumers. 1.2 Business Mission According to research, a good business plan must start with drafting a good company mission statement. Such a statement describes the firm’s fundamental purpose in the surrounding society especially with regards to products or services that it offers to their potential customers. It is also argued that a mission statement must clearly depict some essentials such as the purpose; under this, it is basically what the firm is intending to do and the reasons for its existence in the first place. New Zealand Car Rental Company will basically exist to provide car rental services to many tourists. The other crucial element that it should have is that of the strategy where it must depict its products that it plans to offer and its subsequent competitive position and the competencies that the company will utilize in order to succeed. New Zealand Car Rental Company should formulate plans of actions such as diversification and production of quality products that meet the criteria of the customers and thus in the process acquired competitive edge over its main competitors in the market (Cullen and Parboteeah, 2005) A good mission statement should also have policy and standard of behavior i.e. the mission need to be translated into daily events such as providing quality services to its customers. The other component is that of value and culture which means that the employees and the surrounding community are comfortable and no conflicts are faced. New Zealand Car Rental Company will value its employees well for example their remuneration and work conditions will be among the best provisions as compared to other companies. Through social responsibility context, the company will engage itself in various programs such as supporting tourism projects that are of potential gains to them. New Zealand Car Rental Company and its subsidiaries will offer employment opportunities to those who live near the company premises in an effort to boost the economic standards of such communities. Basically the mission for New Zealand Car Rental Company is to be the world-class car rentals provider in the tourism market, which basically implies that the company tries to reach as many customers as possible (Grant, 2005). 2.0 Situational Analysis For any contemporary company to survive the growing competition and to effectively utilize its opportunities, a situational analysis commonly referred to as PESTLE analysis is very critical and all firms including the New Zealand Car Rental Company should utilize this kind of market analysis. The aim of New Zealand Car Rental Company is to become a market leader in car renting services in Auckland New Zealand by diversifying and reaching to many new markets and an analysis of political, economic, social, technological and legal factors is of benefit to the its operations. However, research indicates that through such analysis, the company will do well in the transport sector of the tourism industry and thus in the process it will gain a large significant market share over time. Through this situational analysis, the company therefore should consider the following concerns (Mark, 2001). 2.1 Economic Factors The other factor which is very important to all companies including New Zealand Car Rental Company is that of factors of economic conditions which may hinder the running of a business. From the previous research it can be noted that the company has constantly evaluated such factors in order to run its business smoothly. Economic factors that must be put in to consideration include inflation which affects the business operations of the firm for example in cases when it is high, there will be increased rise of prices because of increased money supply and thus the customers might not afford to buy. Another factor is that of different rates of foreign exchange systems such as fixed, pegged, clean float and dirt float systems practiced by different companies of investments which may hinder the running of the business. Other economic factors include balance of payments, counter trade, fiscal and monetary policies among other factors. After a detailed and cautious research of car rental companies it is evident that the New Zealand Car Rental Company will not face a lot of such economic factors in their areas of investments However, the company will face economic factors such as inflations and changes of monetary and fiscal policies and should focus on making its reliable projections of the future expectations (Kotler, 1996). 2.2 Social factors Another factor is that of social factor which should be used by many firms including New Zealand Car Rental Company to constantly evaluate or assess success like income sources of potential customers, social systems and structures, educational, religion and family backgrounds which may impact negatively or positively the conduct of business and in this case of car rental services. Since social factors influence beliefs, interests and attitudes of the customers it has been and will be prudent for New Zealand Car Rental Company to evaluate the above factors. The company should do more on environmental management issues whereby it should be in a position of providing the best cars that do not emit harmful gases in their surroundings thus maintaining its social responsibility towards its consumers and publics. 2.3 Technological factors Another key factor of situational analysis is that of technological factors which is nowadays considered as the root of gaining competitive advantage over rival companies in their respective markets. Through globalization, superior and new technologies have been invented and will continue to boost the marketing activities of businesses including that of New Zealand Car Rental Company in the market arena. Computerization should be the key in-thing in New Zealand Car Rental Company marketing operations since it will lead to easy and reliable ways to carry out business transactions such as record keeping and retrieving of information, for example tracking customer’s records in order to supply the car rentals in event of re-orders. The introduction of e-commerce for example should enable New Zealand Car Rental Company to market its product and invent new markets not only in New Zealand but in many countries globally. Such technologies saves costs and time that could have eaten the company’s profits and research reveals that the company should fully utilize such saved funds accrued from utilization of superior technologies to further other investments and activities. Also through electronic financing procedures New Zealand Car Rental Company should be able to carry out its business smoothly without cash flow interruptions. The use of emails and chatting should also contribute immensely to the success of the organization’s employees i.e. they can communicate instantly without many communication barriers. 2.4 Legal factors Another situational factor that necessitates analysis is that of legal factors that might affect a business which varies from one country to another. New Zealand Car Rental Company has a desire to invest in New Zealand where legal issues exist in such markets; however, it should carryout a careful analysis of the legal factors by the management before conducting these transactions. Such factors like legality of the business must be considered. For example the car rental company in New Zealand should ensure that it incorporates the following legal factors the rental service license which is found to be allowing the vehicle owner to rent out his car to an individual intending to drive, this license normally comes up as a result of the requirement of the car rental organization which plays a role of confirming that the car owner has the right to ask for money for renting out his vehicle. (Mark, 2001) we also find that New Zealand has also Health and Safety in employment act which is meant to promote the safety to the workforce in an organization, this act requires an organization to ensure that the safety requirements for all its employees are met. To succeed in its business transaction New Zealand Car Rental Company should ensure that all the business requirements are followed. 3.0 SWOT Analysis Modern businesses are faced with changing business environments and New Zealand Car Rental Company will not be an exceptional from facing such changes within their business context. By carrying out SWOT analysis, environment analysis is very decisive to the company and it is usually analyzed in two extents; the external environment and internal environment examination within the business perspective. Research reveals that the analysis of external environment illustrates opportunities and threats that exist in the market for a firm that may be either present or impending. On the other hand, internal environment examination depicts the strengths and weaknesses that the business may face in the market place (Anthony, 1998). 3.1 Strengths Strength in this context can be identified as that distinctive ability posed by a firm and if the company utilizes such an opportunity it can succeed and can gain competitive advantage, over its rivals in the industry. The most common strength that will be associated with New Zealand Car Rental Company is that of being a market leader in the car renting services. Research indicates that the Company will be better placed than its main rivals in the market in that it aims to have a significantly large market share which will be attributed to its diversification to various branches in New Zealand, the company also intends to have a strong brand name of its products and services which will significantly aid the company in terms of achieving a larger market share. The other strength that the company has is that of the best marketing channels that will aid in the marketing of the car rental services to a wider range of customers. E-commerce and particularly the use of internet will help in the boosting of the company’s chances of exploring new markets for the car rental service provision. 3.2 Opportunities For companies to achieve the set objectives, they have to identify and devise events or features in the business external environment that will give them an added advantage or chance of performing better than their competitors. Such an event or feature can be referred to as an opportunity because it will create more chances to the company by increasing the current proceeds through acquiring a significant market share. New Zealand Car Rental Company has opportunities that if utilized will be of great benefit to the firm because it will lead to exploring and reaching to more new markets. With regards to the emerging new markets of car rental services in New Zealand, the company can take advantage of such opportunity and thus increase its market share. Research indicates that is greater demand for car renting services by the tourism industry in New Zealand the management of New Zealand Car Rental Company should open subsidiaries in some of the country’s cities after carefully analyzing the situational analysis in those potential markets. Since New Zealand Car Rental Company will be among the market leaders in car renting services it should have a well developed financial foundation and thus it will not face any liquidity or cash flow problems. It is for this reason that the company should explore new markets and can compete across the entire market without fearing that competitors can outdo them financially. However, before competing New Zealand Car Rental Company should carry out cost benefit analysis in order to avoid unnecessary expenditure. 3.3 Threat In business context, a threat is regarded as an event which if not taken care of it may possibly deter the accomplishment of company’s goals e.g. customers declining income and competition among other events deemed to causing danger to the operations of the business. New Zealand Car Rental Company will basically be faced with intense rivalry in car rental services since many firms have opted to join the market because it is considered profitable. In fact, in some market segments particularly in New Zealand there has been a significant drop in terms of the company’s market share because new firms has entered the industry. Globalization concept has brought about new inventions and New Zealand Car Rental Company will be faced with the task of coping with such innovations, for example the task of training and development programs to educate the employees on new technologies might be costly and difficult to acquire; such as the use of on-line marketing techniques and networking facilities (Anthony, 1998). 4.0 Marketing Strategy Marketing strategy is a plan of action in which the company has to utilize in order to achieve its stated goals of increasing sales and hence the proceeds. In order to formulate an efficient and effective marketing strategy the New Zealand Car Rental Company issues such as marketing needs and carrying out market research should be handled. The following strategies should be utilized by New Zealand Car Rental Company in marketing its products and services. Gap analysis; this is said to be a planning procedure which typically recognizes possible underperformances in future performance and critically considers how it can be filled excellently. New Zealand Car Rental Company should do this by utilizing forecasting techniques such as time series analysis which should assist it to forecast on the performance of some of its market segments in different regions. This will aid the company to make decisions such as closing the business branches that does not yield good returns and concentrate on those business units that prosper. To effectively carry out gap analysis, it will involve comparing sales and revenues of the company, extrapolating them in to the future founded on past development and deliberation of issues that may affect proceeds. The other strategy that the company should do is that of market development whereby it will comprise coming up with new markets for the existing car rental services. Such new markets achieved may be dissimilar geographically; new market segments or inventing new purposes for the existing products and services. However, the management of New Zealand Car Rental Company should be sharp in formulating speedy, effectual and creative promotional activities which if it succeeds it will yield considerable returns in future years for the company. The other strategy that the Company should focus on is that of product development whereby the marketing strategists of the company should revamp and reposition the car rental services and products to there present markets that will meet the clients’ expectations and needs The other key strategy suitable for New Zealand Car Rental Company is that of diversification whereby it will involve the company exploring new markets and try to market both the existing and the new car rental services and products. Though it is a risky marketing strategy, it will be an ideal strategy for the Company to employ especially in areas perceived to be with less competition and it will be a success if particularly used as a long-term strategy (Hilltop and Sparrow 1994). 4.1 Target Market strategy/marketing objectives According to research, New Zealand Car Rental Company will have to embark on identification of markets that it can do best and it is through this that the company will sell a lot in the target areas. This strategy is normally referred to as segmentation; where the company will have to avoid competing entirely across the entire car rental industry but instead targeting certain markets. Market segmentation will be an ideal situation for New Zealand Car Rental Company since competing across the entire market is expensive and considered to entail a lot of risks that the firm cannot sustain for example unfair competition by its rivals in the market. (Barlon, 2006) This will involve New Zealand Car Rental Company marketing staff subdividing the existing market into different subsets of clientele where each division may be chosen as an intended market to be explored with a different marketing mix strategy. In essence, target marketing strategy will involve market segmentation which the Company will have to find it on the acknowledgment that any segment comprises of potential clients with diverse needs and dissimilar buying behavior. After carefully developing and subdividing the entire car renting market to segments or the target markets, New Zealand Car Rental Company should then position itself on how to carry out the marketing activities in order to meet the overall objective of the corporation. Under this positioning will imply to formation of limits for products in the minds of the intended market in relation to the rivalry faced. Positioning of any firm including New Zealand Car Rental Company is very important since it forms the foundation of all the communication of the company that comprise; branding, publicity, advertising and packaging among other strategies. Therefore it will be advisable for New Zealand Car Rental Company to create a single unique position which will operate as a guide for marketing communications involved thus will aid in transmission of steady image. 5.0 Marketing Mix New Zealand Car Rental Company should implement marketing mix strategy, which apply the common “4 Ps” that stands for; product, price, place and promotion The four elements are considered to work together and the company can fully make use of and will effectively and efficiently yield good results 5.1 Product A product is essentially the basis of an existence of any business and therefore can be said it is the lifeline of any company in trying to achieve its objectives. New Zealand Car Rental Company is should plan to rent cars and vans only which is its main products. 5.2 Price This is referred to as the total amount that a customer pays in order to acquire certain products. The price of a product is a key determinant to marketing activities of any company and usually determined by issues such as identity of the product, quality of such a product and market share of the product among other actors. New Zealand Car Rental Company will offer its products at relatively cheaper prices than that of its rivals. The company therefore should attempt to be a low cost producer in nearly all market shares that it has. However, in some regions the company can offer its products at a premium, this is because the quality and the standard of the products are said to be high and has a strong brand name. The main reason for the company’s performance is that of practicing penetration pricing whereby its car renting services will be defined originally at lower levels but as time goes by, it will raise the prices slowly to meet the company’s needs and to avoid unnecessary losses (Cullen and Parboteeah, 2005) 5.3 Place Place is also very crucial to organizations marketing strategies and usually it refers to where the products and services of the company in this case New Zealand Car Rental Company is found to be located near airports, shipping ports and other entry ways in Auckland New Zealand the reason for this is that many of the company clients who are the tourists will eventually need to board vehicles on their arrivals. However, it simply refers to channels of distribution that the company utilizes that can either be physical or non-physical channels. An example of non physical is that of e-commerce in selling internationally while that of physical is that of chain stores built in an area to store the rental cars to be distributed in the market. Therefore for the New Zealand Car Rental Company to succeed it has to come up with many and suitable channels of distribution which will support the company’s increase in sales and thus attaining a large market share in the market. However, the company has an assignment of identifying the best distributional channels in various markets in order to cope with any competitions from its competitors in the market (Barlon, 2006). 5.4 Promotion This involves all communication strategies used in marketing of a company’s product with an effort of reaching new markets and at the same time retaining the existing market in a particular industry. Promotion will play a key role in gaining large market share for the New Zealand Car Rental Company, in terms of marketing its services the company in its effort to capture the market, it should emphasize on the diverse components of promotional activities which comprise of intense public relations, word of mouth, point of sale and vigorous advertising campaigns. However, the company should also focus on personal selling techniques in order to provide substantial challenge to the competitors in the market (Chekitan and Schultz, 2005). 6.0 Implementation, Evaluation and Control Since the mission statement of the New Zealand Car Rental Company is clear, that it aims at being the market leader of car rental servicing globally it should implement its marketing strategies particularly in the identified target markets. Implementation is putting in to action whatever plan or strategy that the management had formulated and therefore human resource is the most crucial asset in this stage. Research indicates that any company must motivate and provide clear direction to its human resource in order to attain its objectives. Therefore, the New Zealand Car Rental Company should clearly identify the needs of its employees and try to meet them in order to give them an ample opportunity to serve diligently and be dedicated to the company. By offering a competitive package and offering performance contracts to the employees will ensure that they perform to the fullest because they will be highly motivated to work. Good leadership and management skills will be essential to the company’s management staff in order to get command respect of the employees (Lee and Carter, 2005). Previous studies show that for every company to succeed including the New Zealand Car Rental Company in its marketing activities it should constantly evaluate its production and marketing activities in the market place. This will involve the management of the Company comparing the actual sales and projected sales of car rental products and services in the identified market segments. This constant evaluation will ensure that its products and services will retain its market share and at the same time provide an opportunity to decision makers of the company to identify the markets that can be retained and others that can be done away with in the company’s plan. The New Zealand Car Rental Company should also concentrate on monitoring the already existing markets of the company in diverse segments in order to ensure profitability and success of the organization. 7.0 Conclusion and Recommendations The New Zealand Car Rental Company will be among the current market leaders in the car renting industry in New Zealand and therefore it will stand a better chance of attaining a significant market share as a result of the brand name of its products that will be regarded to be of high quality. Every business is faced with challenges and it has to fully adhere to market regulations in order to avoid unfair competition. The concept of globalization cannot be written off either since many firms including the New Zealand Car Rental Company which will diversify to various markets and there will be problems and opportunities associated with such globalization. Therefore the company should formulate strategies that are considered global in nature in order to meet the current expectations of the customers in the target market. Such strategies like build, harvest or divest should be considered by the New Zealand Car Rental Company when assessing the performance of its products in its target markets. Management functions of planning, directing, leading and controlling should be adhered to by the management of the New Zealand Car Rental Company in order to significantly improve the operations of the company by achieving the required targets particularly that of sales increment of the car renting services. The management of the New Zealand Car Rental Company should focus in the future and particularly focusing to both new and existing customers’ needs and expectations. Therefore the available knowledge of customers and markets should facilitate the New Zealand Car Rental Company to construct and develop an extensive range of its products that are considered relevant to its target customers Also the New Zealand Car Rental Company should utilize the concept of marketing research to target and build up its potential markets in order to become an international leader in the car renting business in New Zealand (Daniels and Caroline, 1993). 8.0 Financial Analysis Projected Cash Flow Statement for New Zealand Car Rental for the Period ending September 2009 (Dollars in Millions) Cash Flow from Operating Activities Dr Cr -Net profit 17 -Depreciation and Amortization 3.5 -Gain on Sale of Assets (0.5) 3 20 Change in Working capital -Increase in account Receivable (12) 8 Cash Flow from Investing Activities Capital Expenditure (75) Dividend Declared 1.2 Profit from Sale of Fixed Asset 6 (67.8) Cash Flow from Financing Activities Issue of Common Stock 33 (28) Opening Cash and cash Equivalent 47 19 Closing Cash and cash Equivalent 19 Projected Balance Sheet for New Zealand Car Rental for the Period ending September 2009 (Dollars in Millions) Non Current Assets Property and Equipment Office and Buildings 250 Machinery 35 Motor Vehicles 6 Long-term Loans 64 365 Current Assets Inventories 82 Debtors 63 Repaid Expenses 21 Bank - 166 561 Equities and Liabilities Capital and Reserves Share Capital 100 Evaluation reserves 20 Accumulated Profits 147 267 Non Current Liabilities Long-term Loans 99 Current Liabilities Creditors 72 Bank 43 Tax Due 40 521,000 Read More