Free Essay

Zipcar: Influencing Customer Behavior

In: Business and Management

Submitted By ramiimu
Words 539
Pages 3
Zipcar: Influencing Customer Behavior
Zipcar is a car-sharing service. Members, had to pay annual fees to participate and were assessed usage fees, based on time and mileage, monthly, were provided common use of the service’s vehicles independently of one another. It was started in Boston in 1999 and present in 21 cities with a fleet of 400 cars. It has 30,000 members who are growing at a rate of 1500 per month. Members had to register online with an annual fee of $25 and a refundable amount of $100. Reservations can be done on call or online, a year in advance or a minute before. There are incentives to customers for proper maintenance of cars. Members had to return cars to designated parking locations.
As per its competitive positioning, the major competitors were rental agencies who provided similar services. Other competitors include taxi, cabs and public transport. But Zipcar had competitive advantage of providing flexible services to customers. Supplier power is moderate as Zipcar had its own cars and they don’t have to wait for third party. But buyer power is really strong as buyer may very easily choose for other alternatives like public transport or taxi.
When we see from the framework of nature of the service vs. who is the direct recipient of service. Zipcar would come under possessions and tangible actions i.e. possession-processing (service directed at physical possession) as customers had to do refueling and maintenance.
If we look at the type of variability in the zipcar service, it is EFFORT VARIABILITY. In effort variability, customers expend varying degrees of energy on tasks needed to receive service. It affects other customer’s experience if proper effort by previous customer was not put like in the Zipcar, returning of car on time. Effort variability has impact on service quality and cost, either directly or indirectly. Zipcar tried to reduce this variability by charging penalties to customers who return their car late.
But this late fine can be considered as license to be late. Indeed, late fees often help compensate a business for customers’ costly choices, but they are not always effective in changing their behavior.
Zipcar should focus on Normative control in which it should try to motivate customers about returning car on time and how it affects other customer if they return it late. Zipcar should not only inculcate the behavior of caring for other customer’s but also should find innovate way to promote it. As said by Frances X Frei, Zipcar should opt for Classic Accommodation approach to control effort variability in which it should have backup employees who can compensate for the customer’s lack of effort.
The goal of variability accommodation strategies is to balance the firm and customer value propositions, while maintaining a lead on customer’s willingness to pay. Targeting a narrow set of customers based on their propensity to exert a given level of effort is a way to reduce variability in customer effort without influencing it.
Approaches to manage customer effort variability
• Uncompromised reduction o Target customers based on motivation o Normative approach to preparation and effort
• Classic reduction o Instrumental approach to preparation and effort
• Classic Accommodation o Experienced employees
• Low-cost Accommodation o Customer self-service

Similar Documents

Premium Essay

Zipcar

...zi9-605-054 REV: JUNE 30, 2005 FRANCES X. FREI Zipcar: Influencing Customer Behavior Anita Karr frantically gathered everything she needed for her road trip: water, her favorite “mix” CD from Javier (the ex-boyfriend), ear plugs. After years as a struggling musician her sister was making her debut as the new drummer for No Bags to Check, a performance art/hard rock band that was gaining momentum on the East Coast college circuit. The venue for this breakthrough in her sister’s career was Lupo’s in Providence, Rhode Island and Karr had to be there. Living in Cambridge a car hadn’t been necessary; most of the places she needed to visit on a daily basis were within walking distance of Karr’s Valentine Street apartment. To visit her sister across the river, grocery shop, and run errands Karr relied on Zipcar, which she had signed up for a year ago rather than continue to pay for parking, car insurance, and gas. For tonight’s trip she had reserved weeks ago, using Zipcar’s convenient online reservation system, a VW Jetta Jericho. It was 3:30 pm. Karr was scheduled to pick up the Jetta at 4:00 pm, her sister by 4:30 pm, and arrive at Lupo’s by 6:00 pm. Both she and her sister had figured that this was more than enough time to get to Boston from Cambridge, load the drums, and make Providence by the appointed hour. Karr made one final sweep of her belongings—she couldn’t find Javier’s Best of Bob Dylan CD, which she had conveniently forgotten to return—then gathered her bags and...

Words: 2041 - Pages: 9

Premium Essay

Zip Car

...9-605-054 REV: JUNE 30, 2005 FRANCES X. FREI Zipcar: Influencing Customer Behavior Anita Karr frantically gathered everything she needed for her road trip: water, her favorite “mix” CD from Javier (the ex-boyfriend), ear plugs. After years as a struggling musician her sister was making her debut as the new drummer for No Bags to Check, a performance art/hard rock band that was gaining momentum on the East Coast college circuit. The venue for this breakthrough in her sister’s career was Lupo’s in Providence, Rhode Island and Karr had to be there. Living in Cambridge a car hadn’t been necessary; most of the places she needed to visit on a daily basis were within walking distance of Karr’s Valentine Street apartment. To visit her sister across the river, grocery shop, and run errands Karr relied on Zipcar, which she had signed up for a year ago rather than continue to pay for parking, car insurance, and gas. For tonight’s trip she had reserved weeks ago, using Zipcar’s convenient online reservation system, a VW Jetta Jericho. It was 3:30 pm. Karr was scheduled to pick up the Jetta at 4:00 pm, her sister by 4:30 pm, and arrive at Lupo’s by 6:00 pm. Both she and her sister had figured that this was more than enough time to get to Boston from Cambridge, load the drums, and make Providence by the appointed hour. Karr made one final sweep of her belongings—she couldn’t find Javier’s Best of Bob Dylan CD, which she had conveniently forgotten to return—then gathered her bags and...

Words: 2041 - Pages: 9

Free Essay

Zipcar

...Zipcar, is an innovative car sharing company, founded by Antje Danielson and Robin Chase. In Cambridge Massachusetts, 2000. The business model consist in an immediate, electronic, car rental reservation, using mobile phones. Users can reserve a car at any time, in over 400 college campuses and over 50 airports. Zipcars are located in different areas of USA, Canada, UK, Spain, Austria, France and Turkey. Users have to join using their credit card and wait for an approval, then reserve the desired vehicle, hybrids, SUVs, pickup trucks, luxury vehicles, minivans, and cargo vans, BMW, or Hybrid; then go to the Zipcar parking spaces, unlock the car with a card (Zipcard), and then drive. The driver has to return the vehicle to the same parking space were the car was initially located ready for the next user. Zipcar has its competitors, RelayRides and GetAround offer a similar service, traditional car rentals are another option for the customer, and Uber is also considered a competitor. The main problem that Zipcar is having, and that is mentioned in the case “Zipcar – Influencing Customer Behavior” is that sometimes drivers are not calculating the time they have to use the car and when cars are reserved for another service after, it causes a lateness problem that affects the Zipcar´s service model. As mentioned above, Zipcar, is located in different cities around the world, with more than 10,000 vehicles, it also offers an innovative mobility service that gives their affiliates...

Words: 1577 - Pages: 7

Free Essay

Sm Zipcar

...Case Summary: The case presents a scenario with two Zipcar customers who have both reserved the same car. Sal Fishman reserved it until 3:30, which was exactly when Anita Karr had arranged to pick it up. The problem is that Sal is in the middle of an interview that is going better and longer than he expected. Anita needs the car immediately while an unknowing Sal is considering extending his reservation of the car. For Zipcar to retain customers, the service must be convenient and reliable. Unfortunately, this is not directly in their control, since it relies on the behavior of their customers. The company needs to figure out how to keep their profitable members, retrain the ones that drive the profitable member’s away, and kindly show insufferable negative members the door. Decisions to Make Zipcar must decide two things. (1) The company needs to decide how to reduce the number of late returns by influencing their customers’ behavior. (2) Since some late returns occur by virtue of traffic constraints, automobile accidents, and other unforeseeable problems Competitive Positioning: Zipcar has positioned itself as a low cost alternative to car rental and ownership. They provide wide variety of car for rental including luxury and SUV. The customer can rent the car either on hourly basis or daily basis based on their requirement. The customer has flexibility of reserving car. They can book car anytime as per their convenient. They also have tie up with universities to provide...

Words: 408 - Pages: 2

Free Essay

Zipcar

...Zipcar: Influencing customer behavior Zipcar provides its members, who it has dubbed “ Zipsters”, the freedom of on demand access to a fleet of cars at any hour of the day or night. The fleet of vehicles is parked conveniently in the Zipsters’ neighborhoods or any Zipcar locations without the costs or hassles of car ownership. There is an estimated 10 million driving age residents, commuters and university community members near these locations so Zipcar provides convenient access to all of them. The freedom associated with owning a car is available to Zipsters as well as they are able to choose where, when and for how long they want to drive. Thanks to car sharing vehicle miles traveled are reduced as well as CO2 emissions. Zipcar is able to provide a low cost by cutting costs on infrastructure and employees. Since the cars are parked in parking lots or otherwise on the street and Zipsters unlock it with their card, no employees are needed to man the lots. The cost saving that comes from comparing the ownership of a car or renting from a traditional rental company is also achieved from the fact that Zipcar takes care of maintenance, insurance, parking and gas for its members. The service is mainly offered online, mobile phones and the Zipcar app (today). Zipcar offers high flexibility and convenience and less people interaction. There is no need to deal with any unhappy employees when filling out paperwork and picking up the car. As a result of this customers ar involved in...

Words: 413 - Pages: 2

Free Essay

Zip Car

...ZipCar Marketing Case Write-Up Company ZipCar provides a low-cost alternative to car ownership, traditional car rental services and other vehicle leasing programs. ZipCar operates a subscription based model. Members are required to pay annual fees that would in affect grant them the right to reserve a car at a pre-specified time. ZipCar is headquartered in Boston and commenced operations in 1999; by 2005 it became the largest active car-sharing company in the United States with over 30,000 registered customers1. ZipCar provides a convenient service for individuals who either (i) do not own or could not afford a car, (ii) instances where cost of inconvenience is too high ( i.e. parking, maintenance and insurance) and (iii) Students. ZipCar has forged partnerships with leading several universities across the United States to provide a fleet of fuel efficient cars in exchange for parking spaces. This has allowed for Universities and institutions alike to meet their environmentally friendly targets. ZipCar has recently expanded its fleet to include luxury cars. Customers The customer base for ZipCar tends to include young professionals living in major cities where car ownership would be exorbitantly expensive. Campus universities provided students the option to use ZipCar to meet their green initiatives. ZipCars were conveniently located at parking spaces in densely populated areas that are highly accessible by train and public transportation. ZipCar grew its customer...

Words: 886 - Pages: 4

Premium Essay

Zipcar

...Zipcar: Influencing Customer Behavior Zipcar was a car-sharing service. Started in Boston in 1999, up to 2004, the company had expanded to 21 cities and owned more than 400 cars. Members would have to pay annual fees and monthly fees in order to use this service. The car could be rented hourly or daily and is expected to be returned to the appointed location within the schedule time. The company has recently faced a problem that would influence the reservation schedule. The company needs to figure out a way to influence its customer behavior to return the car on time. In a recent incident, Fishman had picked up the Jetta at 1:00pm for his interview and expected to retune it by 3:30pm, but the interview went beyond the designated time and he could not return the car on time. However, the same Jetta was reserved by Karr weeks ago and she supposed to pick up the car at 3:30pm at that day and drive it to Providence by 6:00pm for an important event. By the time she got to the parking lot where the car should be already waiting, she founded that the car was not there, so she called the company hoping that they could track the car and have it delivered as soon as possible. Meanwhile Fishman excused himself from his interview to call Zipcar to extend his reservation. But he hung up before Zipcar could pick up the phone after someone called him back to the interview. If Fishman did not withdraw himself from the interview and return the car any sooner, Karr would have trouble...

Words: 388 - Pages: 2

Premium Essay

Sharing Economy

...Sharing corps: Should company build competitive advantage by embracing the sharing economy? SHARING CORPS SHOULD COMPANIES build a new competitive advantage BY embracing the SHARING ECONOMY? ECOVALA - December 2013 1 Sharing corps: Should company build competitive advantage by embracing the sharing economy? Ecovala © 2013 This report was produced by the Ecovala in December 2013. If no other source is specified, the contents of this report are under a Creative Commons Attribution – Non-Commercial - Share Alike 3.0 Unported License. You can find the full text of the license in this website. Ecovala Ecovala provides innovative solutions to private and public organisations to accelerate their transition towards sustainability. The organisation offers a wide range of services around sustainability and system innovation: from companies’ environmental assessment to sustainable strategic design, from new green services definition to effective implementation of CSR management. Based in Finland, the organisation is active throughout Europe, relying on an extensive network of like-minded organisations and sustainability experts. www.ecovala.eu Author Erwan Mouazan is director and founder of Ecovala. He develops and implements innovative sustainability solutions both at private and public level. Erwan owns a Master's degree in economics, with a specialization in international management. In the last 9 years, he has worked at international level in environmental...

Words: 10348 - Pages: 42

Premium Essay

Mgmt 1000 Final Exam

...York University Schulich School of Business Marketing Department MKTG 2030 – Winter 2014 – Marketing Management – Sections R, S, T Instructor: Linda Reeser (lreeser@schulich.yorku.ca) Section R: Tuesday 8.30-11.30am – N107 Office: N304. Section S: Tuesday 2.30-5.30pm – N107 Office hours: Tuesday 12-2 or by appointment Section T: Thursday, 2.30-5.30pm – N107 Description Marketing involves satisfying consumer needs and desires with the right product/service, priced at the right level, promoted to the right customers in ways that motivate purchase, and making them available through the right distribution channel. This course represents an introduction to the field of marketing and will focus on the key marketing issues faced by typical consumer-focused companies Objectives 1. To introduce the concepts, analyses and activities that comprise marketing. 2. To provide methods and exercises in assessing and solving marketing problems 3. To reinforce and develop skills critical for business practice. While learning to plan and conduct analyses, and write formal reports to management, students also have the opportunity to work with each other in groups to solve business problems. 4. To communicate your creative ideas effectively, in both written and oral contexts. Required 1. Text: Marketing, Real People, Real Decisions, by Solomon, Marshall, Stuart, Smith, Charlebois, Shah, 4th Canadian edition (Pearson Prentice-Hall, ISBN 978-0-13-262631-6)...

Words: 2162 - Pages: 9

Premium Essay

Blalcal

...Section 100: Monday, 7:30 - 9:50 pm Office Hours: For quick/easy questions, send me an email. For tough questions, career advice and other matters, face to face is better, and I’m happy to meet with you by appointment. Description: GS601 provides an enterprise-wide perspective on the management of information technologies (IT), software applications and the operational processes they support, and the data and knowledge that inform business processes and decisions. The course focuses on how IT professionals and non-technical managers work together to ensure that applications and data are aligned with organizational strategy and business processes. The cases and readings examine how companies in various industries use IT to serve customers well, manage operations efficiently, coordinate with business partners, and make better business decisions. A key theme -- IT as a double-edged sword -- reflects a central challenge: how to maximize the strategic benefits of investments in hardware and software, while minimizing accompanying technical and business risks. The course places equal weight on technical and managerial skills. Our primary objective is to help students prepare to be effective contributors to IT initiatives in partnership with IT professionals, including external service providers here and abroad. Course Learning Objectives: · Understand how information systems – comprised of hardware, software, databases and knowledge repositories, networks and people --...

Words: 7908 - Pages: 32

Premium Essay

Consumption

...policies are effective at promoting sustainable consumption through reusing, renting, repairing, and sharing products and materials? • What GHG reduction benefits can be achieved through these activities? • What strategies, techniques, policies and innovative approaches have not yet been tried but have been proposed that are considered to have greatest potential? Note: This research summary builds on the findings of a previous literature review “Changing Consumer Behavior” presented at the 2012 annual Forum meeting. Many of the issues and key findings related to sustainable consumption are addressed there. Sustainable consumption is a rich and nuanced topic for which extensive literature exists. While not the primary focus of this review, the concepts around sustainable consumption provide a context for exploring specific activities of individual consumers such as renting, repairing, reusing, borrowing, sharing of goods and the ways that governments engage in promoting, influencing and regulating these activities Background While the broader concept of sustainable consumption has been the focus of international policy and research, the formation of the “sharing economy” is an emerging trend that is just now capturing the interest of researchers, policy...

Words: 5133 - Pages: 21

Premium Essay

Kpmg, Global.

...KPMG INTERNATIONAL KPMG’s Global Automotive Executive Survey 2012 Managing growth while navigating uncharted routes kpmg.com/automotive II | KPMG’s Global Automotive Executive Survey 2012 Acknowledgements The Global Automotive Executive Survey is KPMG International’s annual assessment of the current state and future prospects of the worldwide automotive industry. In this year’s survey, 200 senior executives from the world’s leading automotive companies were interviewed, including automakers, suppliers, dealers, financial service providers, and for the first time mobility service providers. The responses make for compelling reading and we would like to thank all those who participated for giving us their valuable time. We would also like to acknowledge and thank the following senior executives who participated in in-depth interviews to provide further insight: (Listed alphabetically by organization name) Dr. André Stoffels Head of Strategy Audi Steven Bridgeland Senior Product Manager, Windows Embedded Microsoft Special thanks to Moritz Pawelke, Meghan Bested and Martha Collyer for their efforts. © 2012 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved. Foreword Imagine the following scenario, involving an urban dweller, possibly living in a mega-city like...

Words: 17036 - Pages: 69

Premium Essay

Fitbit Ultra

...brief background and history of Fitbit, Inc and introduce the device features. The second section will cover a Market Analysis of the Fitbit Ultra. Research done on the demographic trends and economic trends that currently impact marketability of the Fitbit Ultra will be discussed. Additionally, consumer’s tastes and preferences, along with cultural factors that influence consumer purchasing of the device will also be covered in this report. Aspects of product positioning, to include social factors, personal factors, psychological factors, and other behavior that would influence a consumer to purchase the Fitbit Ultra will help identify more specific marketing strategies. The next section is devoted to research of the competition. This will include a SWOT analysis and a synopsis of the most competitive brands vying for market share with Fitbit Ultra. Analyzing the target markets and their potential for best customer impact is explored as well. The report will explore branding and services regarding the Fitbit Ultra and the website Fitbit.com. Pricing is a vital component of any market report, so details will be presented with promotional information followed by marketing potential. Concluding information and recommendations will summarize the outcome of this research project on the Fitbit Ultra. Describe the key features or your product/service and its history, such as previous releases/models. Fitbit, Inc...

Words: 22064 - Pages: 89

Premium Essay

Canhan

...publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning or otherwise, except as permitted under Sections 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, Inc. 222 Rosewood Drive, Danvers, MA 01923, website www.copyright.com. Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030-5774, (201) 748-6011, fax (201) 748-6008, website www.wiley.com/go/permissions. To order books or for customer service please, call 1-800-CALL WILEY (225-5945). ISBN 978-0-470-34381-4 Printed in the United States of America 10 9 8 7 6 5 4 3 2 1 Preface Information technology and business are becoming inextricably interwoven. I don’t think anybody can talk meaningfully about one without the talking about the other.1 Bill Gates Microsoft I’m not hiring MBA students for the technology you learn while in school, but for your ability to learn...

Words: 175164 - Pages: 701

Premium Essay

Business and Management

...publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning or otherwise, except as permitted under Sections 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, Inc. 222 Rosewood Drive, Danvers, MA 01923, website www.copyright.com. Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030-5774, (201) 748-6011, fax (201) 748-6008, website www.wiley.com/go/permissions. To order books or for customer service please, call 1-800-CALL WILEY (225-5945). ISBN 978-0-470-34381-4 Printed in the United States of America 10 9 8 7 6 5 4 3 2 1 Preface Information technology and business are becoming inextricably interwoven. I don’t think anybody can talk meaningfully about one without the talking about the other.1 Bill Gates Microsoft I’m not hiring MBA students for the technology you learn while in school, but for your ability to learn...

Words: 175164 - Pages: 701