Proposed Market Research for Famuss car Rental Essay

Proposed Market Research for Famuss car Rental - Essay Example In 2009 Car rental industry, took a major plunge due to economic recession. But they slowly emerged out from recession and in 2012 and 2013 this industry looked very positive and they started to gain profit. With the growth in the tourism industry the growth of car rental agencies has risen (Henry, 2008, p.57). The travellers have the liberty to move around freely with such rental cars. A growing number of air travellers had led to the increase in revenue of the car rental agencies around the world. Discussion The Trends in the Overall Market The car rental industry is a major part of the transport industry. It is affected by various factors like increase in the GDP growth which in turns results in increase in the number of air travellers. 45 to 50 Millions of vehicles are rented all across the Europe. The importance of car rental industry can be seen from the growth of major car rental companies like Enterprise Rent a car and National Car Rental. For example UK’s largest car rental company National Car Rental has a fleet base of over 40,000 vehicles and 170 branches all over. Both of the above mentioned companies have received prestigious ITM awards and have made notable contributions in the sector (Vogel, 2012, p. 124). The global Car rental industry is now facing radical transformations. Some year ago most of the major car rental companies of US were owned by the car manufacturers (Lee, 2013, p. 1). Now only Ford has their own car rental business named Hertz. But apart from that most of the other large car rental companies are owned by individual companies who are only into car rental business. Few examples are Alamo Rent a Car and National Car Rental are owned by Taylor family of St. Louis; Budget and Ryder is owned by Sandy Miller who is a former franchisee. These players along with a few others control over 90 per cent of the market (Autoescape. 2013, p. 12). Here are some of the facts of car rental industry of US in 2012 It employed over 126,000 i n US The Total revenue grew from $31.6 billion in 2007 to $33.7 billion in 2012, which shows that the industry is rising. Demand of car rental companies increased throughout 2012 as the air travel cost increased. The revenue is expected to grow from 5.6% in 2012 to 3.0% in 2013. The number of foreign tourist which visited the US had increased by 3.4% for the past five years to 2012. Market Segment Famus Car Rental intends to target basically two markets. The market of the company is segmented into two parts the luxury car segment as well as the economy segment. The company thinks that the luxury cars would be the suitable in case of the special occasions (McDonald and Hawkins, 2013, p. 15). The people may hire the luxury cars during the weddings or various events. On the other hand the economy cars would be hired on the day to day basis for the regular requirements of the individuals. The market for the high end customers would be comparatively niche because the rental costs of the cars would be more. On the other hand the rental costs of the cars would be less for the economy sections. The luxury cars would also be taken by the business travellers. The business travellers would not hesitate to pay the high price for the cars. On the other hand the event management companies would also be an ideal target market for the luxury cars. The competition in this