MBA IV Semester

EASYCAR.COM

Priya Saraswat, Anupama Nahar, Tulsi Karki

A Case Study Analysis on

Case overview

The case focuses on the history of easycar.com and car rental industry.The case focuses on the history of easycar.com and car rental industry.

It also highlights the rapid expansion, apparent success and the future It also highlights the rapid expansion, apparent success and the future strategy of easycar.strategy of easycar.

It also focuses on the 5 P’s of marketing mix out of 7 P’s of service It also focuses on the 5 P’s of marketing mix out of 7 P’s of service marketing (product, place, price, promotion, processmarketing (product, place, price, promotion, process))

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7 P’s

Process

PricePromotion

Place

ProductPublic

Evidence

People

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Brief introduction

Easy Car is into Car rental services. It is a member of easy group of companies Easy Car is into Car rental services. It is a member of easy group of companies founded by Greek entrepreneur Steilos Haji-Ioannou.founded by Greek entrepreneur Steilos Haji-Ioannou.

Steilos first founded low cost air carrier easyjet.com with investment of Steilos first founded low cost air carrier easyjet.com with investment of $43.47 million and after the success of this he expanded his business to $43.47 million and after the success of this he expanded his business to easycar.comeasycar.com

In the 3In the 3rdrd year of its operation the co. crossed its BEP and generated $16.1 year of its operation the co. crossed its BEP and generated $16.1 million.million.

Business model was same as that of the airline industry and the total Business model was same as that of the airline industry and the total investment was of $ 16.1 million.investment was of $ 16.1 million.

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The rental car industry

The industry is semi integrated and there is the ripe for consolidation.The industry is semi integrated and there is the ripe for consolidation.

Many national, regional and international company.Many national, regional and international company.

International companies which are dominant in some European cities International companies which are dominant in some European cities are Avis, Europe car, Hertz and SIXT.are Avis, Europe car, Hertz and SIXT.

The industry is semi integrated and there is the ripe for consolidation.The industry is semi integrated and there is the ripe for consolidation.

Many national, regional and international company.Many national, regional and international company.

International companies which are dominant in some European cities International companies which are dominant in some European cities are Avis, Europe car, Hertz and SIXT.are Avis, Europe car, Hertz and SIXT.

Contnd….

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Leisure segmentConstitutes 45-65% very price conscious

Business segment Constitutes 35-55%Less price sensitive

CUSTOMER SEGMENTS

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The Growth story of Easycar

Easy car came into existence eon 20Easy car came into existence eon 20thth April 2000. April 2000.

The co. opened first location at London then in Glasgow and Barcelona.The co. opened first location at London then in Glasgow and Barcelona.

Co. choose these location because these were very popular Easyjet Co. choose these location because these were very popular Easyjet destination.destination.

vehicle it rented was Mercedes a class at rate of $24.15 per day plus one day vehicle it rented was Mercedes a class at rate of $24.15 per day plus one day car preparation fee of $12.8.car preparation fee of $12.8.

It quickly expanded to the 48 location in 5 countries of Europe by Jan 2003.It quickly expanded to the 48 location in 5 countries of Europe by Jan 2003.

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By 2003 it has 7000 fleet of vehicles at 28 location it provides By 2003 it has 7000 fleet of vehicles at 28 location it provides Mercedes A class, ford focus at 4 location, Renault Clious at 3 Mercedes A class, ford focus at 4 location, Renault Clious at 3 locations, Toyota Yarises at 3 location Mercedes smart at 2 location, locations, Toyota Yarises at 3 location Mercedes smart at 2 location, Vauxhall Corsas at 7 location.Vauxhall Corsas at 7 location.

The major market was UKThe major market was UK..

Contnd….

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Easycar outlets

Its outlets are not located in posh area of European citiesIts outlets are not located in posh area of European citiesIts outlets are near bus train station and some are near airport but on the off Its outlets are near bus train station and some are near airport but on the off side of airport.side of airport.Airport located outlet are opened 24 hrs while others working hrs are 7am to 11 Airport located outlet are opened 24 hrs while others working hrs are 7am to 11 pm.pm.The outlets are min equipped .The outlets are min equipped .At a particular location there are only 1 or2 people working at a time.At a particular location there are only 1 or2 people working at a time.

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MB E Class

Example Vehicles: MB E Class Saloon

Example Vehicles: Volvo V70 EstateMB C Class Saloon

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Process

Customer have to come before booking time

Customer is required to bring some documents

Around ½ hr is consumed in process of telling about companies policies etc.

The vehicle rented have reserve fuel…on returning fuel must be equal to this.

The return of the vehicle is within prearranged 1 hr of time period.

Customer is expected to clean the car & then easycar employee will check it.

Price

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The Company followed Demand based Pricing and strategy it followed was The Company followed Demand based Pricing and strategy it followed was Synchro-Pricing.Synchro-Pricing.

Although it advertised the rent as low as Although it advertised the rent as low as € 5/day.5/day.

This amount was applicable to weekdays only othewise the rates are slightly This amount was applicable to weekdays only othewise the rates are slightly higher.higher.

As the rental date come near the price raises.( to achieve 100% fleet As the rental date come near the price raises.( to achieve 100% fleet utilization)utilization)

The total money which the customer paid is sometimes higher than the rental The total money which the customer paid is sometimes higher than the rental charges. Eg:-charges. Eg:- those who go beyond 100km are charged those who go beyond 100km are charged €.12/km..12/km. late return fee is late return fee is € 120 per day.120 per day.

Promotion

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Company used low cost occurring media to advertise.Company used low cost occurring media to advertise.

It used posters and press.It used posters and press.

Free publicity.Free publicity.

In 2002- $2.30 millionIn 2002- $2.30 million.

Strength

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Company is Financially strong.

The business model which was once used and proved to be successful in airline industry is being used in rental industry.

The Company’s founder is highly competent.

No agent between the customer and the company.

Demand based pricing approach to attain maximum utilization.

High use of latest technological equipments.

Contd…

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Opened first at those places where it is already known.

The first car it rented was Mercedes A class, then it went to less costly car segments.

Transparency of various prices to the customer.

In first three year of its operation it has achieved its Break Even Point.

Weakness

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It offer only one kind of car at a location.

The process of picking up the car takes 30 minutes due to low manpower.

Lots of documentation formalities.

Very low advertising strategy.

Opportunity

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In the industry, there is ripe for consolidation.

Rental for one hour and booking for one hour can be used as Taxi etc.

Threat

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Legal Challenges.

Competitors.

ConclusionIn our point of view, the service and the process provided by the Easycar is efficient, since every step from renting the car to returning the car is very clear and easy to handle.

Booking directly from the Web site is more convenient for the customers.

There is no requirement for the customers to pay in full at the time of booking and it’s not refundable; every charge for renting a car is clearly listed on the Web site in order not to confuse the customers.

continued

• Moreover, easyCar’s pricing and promotion strategies are effective. The reasons are that it did differentiate itself from its competitors with its low price, as low as €5 per day plus a per-rental preparation fee of €4 and generally its price was less than half that its major competitors. It’s very important factor for leading the market.Its taking advantage of free publicity to advertise its brand was also innovative and operational

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