Luxury Car Renting Service for Entrepreneurship - myassignmenthelp

Question: Discuss about theLuxury Car Renting Service for Entrepreneurship. Answer: Introduction Entrepreneurship is the process of starting a new business and the person who starts the business is known as an entrepreneur (Drucker, 2014). Entrepreneurship is crucial to the growth of the economy. This is precisely why governments of various countries provide extensive subsidies and tax rebates to entrepreneurs in order to encourage them. This report throws light upon the new business of renting luxury cars to people for short durations. Need Identification For the success of any business, it is essential to analyze a need gap in the market and work towards fulfilling that need (Baker, 2016). Owing to the increasing price as well as increasing traffic on the roads, governments are encouraging people to use public transport. There are various tourists who visit the country and find it difficult to rent out good quality cars. Most of the car renting businesses do not provide good quality cars. Therefore, there is a need in the market to create a business where luxury cars could be rented out to people for a pre-defined duration. Business overview This business would adopt a low cost of development strategy. Instead of buying cars and then renting out to customers, the business would create a platform where luxury car owners can register their cars to be given on rent and customers who need cars for a few days can select the car that they like, specify the duration and rent the car. Target Market Target market of a business includes the set of customers whose needs the business aims to fulfill (Armstrong et. al., 2015). The predominant target market of the business would include tourists who are visiting the city for a few days and need a car to travel around the city. Moreover, people who wish to travel to nearby destinations for weekend getaways or personal events will also be targeted. Target market of a business is defined post dividing the marketing into various segments based on geography, psychographic or demography. The target market for the business would include: Demographic segmentation: This business would target customers belonging to the high income group of the society. The business would target adults over the age of 24 and families on vacations. Psychographic segmentation: The business would target customers who lead a lavish lifestyle and technologically savvy. Benefits of the model Two important benefits of the model include that people who own luxury cars can earn some money on their cars while customers who need cars to travel can avail the facility of having a car for the particular duration as they require. This business model is therefore an important platform for bridging luxury car owners and luxury car renters. Business model The owners of cars can register their cars with the business using the companys mobile application. The owners cars would be tested for quality and legal ownership. The customers who wish to rent the car can register on the mobile application and rent out their preferred car for their preferred time duration. The customers identity would be validated and police verification would be conducted. Customers renting the car would pay a 70% advance fee. 60% of the total fee would be provided to the car owners of which 20% would be paid in advance and 40% would be paid after returning the car post service, repair and cleaning. Customer who rent the car would also pay a fixed refundable deposit that would be returned to them upon returning the car and ensuring the state of car or required repairmens. Organizational structure As a start-up, the business would have two owners, two people in the HR department and a 12 people sales team. 5 members of the sales team would target owners of luxury cars and get them to register with the business. The remaining 7 members of the sales team would target customers who are interested in renting cars. Two people of the organization would be dedicated to ensuring the effectiveness and efficacy of the organizations IT. The organization would adopt a flat hierarchical structure and enable open communication within the business. Open communication creates transparency and improved organizational culture (Alvesson, 2012). Sources of finance Business would approach angel investors for initial round of finance. The organization would require an initial funding in order to fulfill the following objectives: The approximate funding required by the business would be close to AUD 150000. Particulars Approximate expenses Human resource management Recruitment and employee salaries AUD 30000 Office expenses rent and infrastructure AUD 50000 IT expenses AUD 45000 Sales cost AUD 12000 Office overheads AUD 7000 Total AUD 144000 Marketing Mix For the success of a business, it is imperative to define the marketing mix of the business. The marketing mix involves identifying the 4Ps of the business. Product, Price, Place and Promotion are the primary 4 Ps of the business (Wilson Gilligan, 2012). Product The core product is the original primary product offered by the business (Khan, 2014). The core product in this case is ideally a service of renting luxury cars. The actual product offered by the brand is the timely delivery of the car to the customer on requested time. The car would be given to customers in perfect quality. GPS would be installed in every car in order to track the customers location. Once the customer returns the car, the owners will receive their cars back after cleaning and servicing. The augmented offering of the service includes the luxury and the convenience offered to customers. Place The startup would be established at Sydney. However, customers from all over Australia would be targeted. The sales team would be travelling to different parts of the country to target customers. Price The business would adopt a premium pricing strategy. This strategy involves pricing a product or service higher than the market price in order to encourage favorable perception among buyers (Nagle, 2016). This business is differentiated from other car renting services by targeting a niche group of customers who demand only luxury cars and would be willing to pay a premium price for the service. Dynamic pricing strategy would also be adopted by the business. This strategy follows a dynamic pricing routine wherein price varies depending upon the demand of the service (Abrate, 2012). Promotion Promotion strategies are adopted by businesses to reach out to their consumers. The following promotion strategies would be adopted by the business: Social media marketing: SMM involves marketing of a product or service via social media platforms including Facebook, Instagram, Twitter and Pinterest (Tuten Solomon, 2017). Social media marketing enables a business to reach out to a wide number of audience through a single platform. Digital marketing: Promoting any product or service using digital media is a form of digital marketing (Smith, 2011). Digital marketing strategies would be adopted by the business to optimize the businesss search over various search engines including Bing, Yahoo or Google. Billboards and Hoardings: In order to introduce a new product to the market, advertising the product via billboards and hoardings are an attractive way to enhance awareness about the brand. This strategy would adopted by the business introduced to reach out to different geographical customer segments within Australia. Conclusion Entrepreneurship breeds on innovation, creativity and an existing need gap in the market that needs to be fulfilled. This report highlights upon a new business idea of renting luxury cars to people for short duration. The business mode consists of a mobile application where car owners can register their cars and customers can rent out cars for a specific duration. It is a premium priced service with an aim to provide luxury cars to tourists and families on vacations. Promoting the business through innovative digital marketing strategies would enable the business to reach out to wider audience. Effective execution and the right marketing strategies would lead the business to a massive success. References Abrate, G., Fraquelli, G., Viglia, G. (2012). Dynamic pricing strategies: Evidence from European hotels.International Journal of Hospitality Management,31(1), 160-168. Alvesson, M. (2012).Understanding organizational culture. Sage. United States. Armstrong, G., Kotler, P., Harker, M., Brennan, R. (2015).Marketing: an introduction. Pearson Education. India. Baker, M. J. (2016). What is marketing?. InThe Marketing Book(pp. 25-42). Routledge. United Kingdom. Drucker, P. (2014).Innovation and entrepreneurship. Routledge. United Kingdom. Khan, M. T. (2014). The concept of'marketing mix'and its elements (a conceptual review paper).International journal of information, business and management,6(2), 95. Nagle, T. T., Hogan, J., Zale, J. (2016).The Strategy and Tactics of Pricing: New International Edition. Routledge. United Kingdom. Smith, K. T. (2011). 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