2. Using the chain ratio method described in Appendix 3 , Marketing by the Numbers, estimate the market potential for the Tesla 3. Search the Internet for reasonable numbers to represent the factors you identified in the previous question. Assume that each buyer will purchase only one automobile and that the average purchase price is $40 000. End-of-Chapter Case Zipcar: It’s Not about Cars—It’s about Urban Life Imagine a world in which no one owns a car. Cars would still exist, but rather than owning cars, people would just share them. Sounds crazy, right? But Scott Griffith, CEO of Zipcar, the world’s largest car-share company, paints a picture of just such an imaginary world. And he has nearly 800 000 passionate customers—or Zipsters, as they’re called—who will back him up. Zipcar specializes in renting out cars by the hour or day. Although this may sound like a minor variation on the established rental car agency business, it’s actually an entirely different concept.
A Car Rental Company that Isn’t about Cars As Griffith considered what Zipcar had to offer, it was apparent that it couldn’t be all things to all people. The market for car rentals would have to be carefully segmented, and Zipcar would have to choose just the right segment to target. Griffith identified a segment of the market that was not being served by traditional car rental companies: Not travellers visiting another city, but people who sometimes need a car for a few hours, or a day, in the city they live in. People who live in big cities like New York, Boston, and San Francisco, who don’t own a car of their own. And students who don’t have cars, and occasionally need one. In Canada, Zipcar has locations in Kitchener-Waterloo, London, Ottawa, Toronto, Vancouver, and Victoria—all of which are university towns. The Zipcar concept is also particularly well suited to people who live or work in densely populated neighbourhoods in cities, where owning a car is difficult, costly, and environmentally irresponsible. Interestingly, Zipcar doesn’t see itself as a car-rental company. Instead, it’s selling a lifestyle. “It’s not about cars,” says CEO Griffith, “it’s about urban life. We’re creating a lifestyle brand that happens to have a lot of cars.” So Griffith segmented the market, identified a market that was underserved, and decided to target it. The next step was to position Zipcar in the minds and hearts of consumers. Initially, the Zipcar brand was positioned exclusively round a value system. As an urban lifestyle brand, Zipcar focused on traits that city dwellers have in common. For starters, the lifestyle is rooted in environmental consciousness. At first, Zipcar focused on green-minded customers with promotional pitches such as “We ♥ Earth” and “Imagine a world with a million fewer cars on the road.” Zipcar’s vibrant green logo reflects this save-the-Earth philosophy. And Zipcar really does deliver on its environmental promises. Studies show that every shared Zipcar takes up to 20 cars off the road and cuts carbon emissions by up to 50 percent per user. On average, Zipsters travel
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