easy car
Content
A Case Study Analysis on
EASYCAR.COM
Group 8 :Praveen S- 11041 Vipin Bajaj- 11060 Shubha G S- 11109 Gaurav Sharma- 11138
Footer Text 11/22/2012 Vasanth Raj- 11178 1
Case Overview
The case focuses on the history of easycar.com and car rental industry It also highlights the rapid expansion, apparent success and the future strategy of easycar It also focuses on the 5 P’s of marketing mix out of 7 P’s of service marketing (product, place, price, promotion , process)
7 P’s
Product People Place
7 P’s
Process Price
Physical Evidence
Promotion
Footer Text
11/22/2012
3
Case Facts
Easy Car is into Car rental services. It is a member of easy group of companies founded by Greek entrepreneur Steilos Haji-Ioannou 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 easycar.com In the 3rd year of its operation the co. crossed its BEP and generated $16.1 million. Business model was same as that of the airline industry and total investment was of $ 16.1 million
About Company
• EasyCar was founded in 2000 by a Greek entrepreneur Stelios • EasyCar only rents one specific car at each of their locations and books entirely online or over the phone • It provides car rental in more than 2,400 locations in over 60 countries, including the UK, Ireland, the USA, Canada, Spain, Switzerland, France, Portugal, Italy, Greece, Cyprus and South Africa • They do not offer the option of delivery and collection • They do not give refunds for cancellations • They charge a minimum amount for telephone bookings.
Process
• .
Customer have to come before booking time Customer is required to bring some documents Around 30 min are consumed in describing about company policies While returning the fuel must be above the reserved level Vehicle will be returned in within 1hr of the described time Customer is expected to clean the car before returning
Pricing
The Company followed Demand based Pricing and strategy itfollowed was Synchro-Pricing.Although it advertised the rent as low as€5/day This amount was applicable to otherwise the rates are slightly higher. weekdays only
As the rental date come near the price raises.( to achieve 100% fleet utilization) The total money which the customer paid is sometimes higher than the rental charges. Eg:-those who go beyond 100km are charged€.12/km late return fee is €120 per day.
About Industry
The industry is semi integrated and there is the ripe for consolidation Many national, regional and international company which are dominant in some European Countries are Avis ,Europe car , Hertz and SIXT.
Issues
Customers can wait for a long time for their vehicle. Competition is larger and more dominant in Europe. Customers are responsible for gassing up and cleaning their vehicles before drop off or charges are applied. Level of quality is inconsistent. Vehicles are expensive but quality of service is low. Extra fees raise the overall price much higher than the initial rental price. Customers cannot get their money back for cancellations. Legal issues. Cancellations and Posting Pictures Policy.
What are the characteristics of the car rental industry? How do these characteristics influence the design of service delivery process in this industry in general?
• • • • •
few players (Avis, Europcar, Hertz) wide range of vehicles were business and tourist’s people Agents and Brokers website wasn’t used efficiently
Easy Car obviously competes on the basis of low price. What does it do in operations to support this strategy?
• same type of car for its fleet for a particular area • 90% of utilization • infrastructure is needed for only 15 to 20 cars at the maximum • Elimination of agents and brokers • Clean car policy • advertisements behind the car
How would you characterize the level of quality that Easy Car provides?
• They provided best in class cars • “The Promise given is delivered” • cost is made transparent
Is easyCar a viable competitor to taxis, buses and trains as Stelios claims? How does the design of its operations currently support this form of competition? How not?
• The market share of taxis, buses and trains • Company positioned itself as a transportation company • Company’s operations were flexible ( pick up and drop times)
What are the operational implications of the changes made by EasyCar.com in the last year?
• pricing more transparent • Pre-preparation of the car was reduced • The company’s policy requiring customers to purchase insurance
How significant are the legal challenges that easyCar is facing?
• 7 days to change or cancel reservations without penalty may cause utilization to fall from 90% to 65% and prices to triple • an significant impact as they had yield management approach • legal challenge of EasyCar faces deals with its posting of the pictures • It may affect brand position and brand value
EASYCAR.COM
Group 8 :Praveen S- 11041 Vipin Bajaj- 11060 Shubha G S- 11109 Gaurav Sharma- 11138
Footer Text 11/22/2012 Vasanth Raj- 11178 1
Case Overview
The case focuses on the history of easycar.com and car rental industry It also highlights the rapid expansion, apparent success and the future strategy of easycar It also focuses on the 5 P’s of marketing mix out of 7 P’s of service marketing (product, place, price, promotion , process)
7 P’s
Product People Place
7 P’s
Process Price
Physical Evidence
Promotion
Footer Text
11/22/2012
3
Case Facts
Easy Car is into Car rental services. It is a member of easy group of companies founded by Greek entrepreneur Steilos Haji-Ioannou 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 easycar.com In the 3rd year of its operation the co. crossed its BEP and generated $16.1 million. Business model was same as that of the airline industry and total investment was of $ 16.1 million
About Company
• EasyCar was founded in 2000 by a Greek entrepreneur Stelios • EasyCar only rents one specific car at each of their locations and books entirely online or over the phone • It provides car rental in more than 2,400 locations in over 60 countries, including the UK, Ireland, the USA, Canada, Spain, Switzerland, France, Portugal, Italy, Greece, Cyprus and South Africa • They do not offer the option of delivery and collection • They do not give refunds for cancellations • They charge a minimum amount for telephone bookings.
Process
• .
Customer have to come before booking time Customer is required to bring some documents Around 30 min are consumed in describing about company policies While returning the fuel must be above the reserved level Vehicle will be returned in within 1hr of the described time Customer is expected to clean the car before returning
Pricing
The Company followed Demand based Pricing and strategy itfollowed was Synchro-Pricing.Although it advertised the rent as low as€5/day This amount was applicable to otherwise the rates are slightly higher. weekdays only
As the rental date come near the price raises.( to achieve 100% fleet utilization) The total money which the customer paid is sometimes higher than the rental charges. Eg:-those who go beyond 100km are charged€.12/km late return fee is €120 per day.
About Industry
The industry is semi integrated and there is the ripe for consolidation Many national, regional and international company which are dominant in some European Countries are Avis ,Europe car , Hertz and SIXT.
Issues
Customers can wait for a long time for their vehicle. Competition is larger and more dominant in Europe. Customers are responsible for gassing up and cleaning their vehicles before drop off or charges are applied. Level of quality is inconsistent. Vehicles are expensive but quality of service is low. Extra fees raise the overall price much higher than the initial rental price. Customers cannot get their money back for cancellations. Legal issues. Cancellations and Posting Pictures Policy.
What are the characteristics of the car rental industry? How do these characteristics influence the design of service delivery process in this industry in general?
• • • • •
few players (Avis, Europcar, Hertz) wide range of vehicles were business and tourist’s people Agents and Brokers website wasn’t used efficiently
Easy Car obviously competes on the basis of low price. What does it do in operations to support this strategy?
• same type of car for its fleet for a particular area • 90% of utilization • infrastructure is needed for only 15 to 20 cars at the maximum • Elimination of agents and brokers • Clean car policy • advertisements behind the car
How would you characterize the level of quality that Easy Car provides?
• They provided best in class cars • “The Promise given is delivered” • cost is made transparent
Is easyCar a viable competitor to taxis, buses and trains as Stelios claims? How does the design of its operations currently support this form of competition? How not?
• The market share of taxis, buses and trains • Company positioned itself as a transportation company • Company’s operations were flexible ( pick up and drop times)
What are the operational implications of the changes made by EasyCar.com in the last year?
• pricing more transparent • Pre-preparation of the car was reduced • The company’s policy requiring customers to purchase insurance
How significant are the legal challenges that easyCar is facing?
• 7 days to change or cancel reservations without penalty may cause utilization to fall from 90% to 65% and prices to triple • an significant impact as they had yield management approach • legal challenge of EasyCar faces deals with its posting of the pictures • It may affect brand position and brand value
