Strategic Marketing Plan
Car2go
June 18, 2013
BMKT 161
Jintao Shao
Hongtao Lou
Yi-Chien Chen(Claire)
YaweiWang(Martin)
1. Executive Summary
Car2go is a subsidiary of Daimler AG, which provides car-sharing service in North
America and Europe.
Basically, Car2go offers exclusively two-seats cars that
charging by the minute (with hourly and daily rates available). The creativity and
multi-cultural appeal of the product will be coupled with a premium price and socially
responsible business practices to target young urban professionals. Car2go will
compete with the Zipcars and other car rental companies in BC. The financial focus
will be on short-term sales, as the company will work on establishing and maintaining
brand loyalty among its target markets, which requires reasonable price, diversity of
vehicles, a number of service location, and special promotion, such as corporation
with Cineplex. Even though car2go may face a big challenge by the marketing
improvement, the customers’ need is a significant segment that the company will pay
more attention.
2. Strategic Focus and Plan
a. Mission statement
Recommend new ideas to help Car2go expand their business in British Columbia,
including increasing Car2go’s market share and brand awareness in the car rental
industry by equipping with diversified vehicles, providing good customer services,
and setting reasonable prices.
b. Corporate goals
Car2go strives to achieve both nonfinancial and financial goals in the coming two
years.
Nonfinancial goals:
o Establish the brand as offering convenient car rental services.
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o Distinguish the product as convenient and comfortable to those offered
bycompetitors.
o Create brand loyalty through customer loyalty cards, gift card and
social responsibility
o Attract special customer group such as environmentalists by providing
environmental friendly vehicles.
o Provide different kinds of vehicles rather than only 2 seats cars in order
to meet all kinds of customers’ needs.
o Collaborate with other companies from different industries, such as
Cineplex to provide free movies to loyal customers.
o Develop brand awareness through social media and professional
website about Car2go.
Financial goals:
o Achieve sales revenue of $2,000,000 by year one
o Increase sales revenue to $2,700,000 by year two
o Attain a membership increase of 10% by year one
o Increase new members to15 % of total by year two
c. Core Competency and Sustainable Competitive Advantage
Car2go want to increase memberships and revenues in car rental industry with
convenient services, comfortable consumption experience and diversity of loyalty
rewards. Car2go locates in downtown which is a busy and full of opportunities place.
A sustainable competitive advantage will be achieved by annually evaluating the
customer needs to ensure the services remain convenient, comfortable, and appealing
to a variety of customers.
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3. Situation Analysis
SWOT TABLE
Internal Factors
Strengths
Weaknesses
Offerings
High quality vehicles,
convenience, unique
Less kinds of vehicles,
only provide 2 seats cars
Marketing
Significant in using social
media, relationship
marketing
Restriction of categories of
the vehicles
Management
Strategic price, Location
Low face to face
orientation and services
Finance
Well constructed plan for
expenditures and financial
management
Little contributed capital
Social Responsibilities
Low pollution for the
environment
Net Profits decrease as
expenditures for more
eco-friendly products
occur
External Factors
Opportunities
Threats
Demographic
A large group of people
who have the drive license
Different incomes
Socio-cultural
Environmental awareness
The difference in values,
personal privacy
Economic
High GDP & Car rental
industry
Industry is effected
negatively during
recession
Technological
gasoline-powered&
electric-powered, usage of
social media and
smartphone apps
Limited funds for
technological advances
Competitive
Flexible time renting, low
price, easy parking, and
market growth
Lack of kinds of vehicles
Regulatory
Under the protected and
equal standard
Hard to control danger and
impair driving
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Growth strategies
Market-Product Analysis
 Market penetration
1. Price Adjustments:
One common market penetration strategy is to make price adjustments. By lowering
prices, the business hopes to generate more sales volume by increasing the number of
units purchased and to make prices more appealing to consumers when compared to
the competition(Chris). In this case of car2go, the company decides to decrease their
listed price by hourly and daily.
2. Increased Promotion:
Companies may choose to increase market penetration through greater promotional
efforts. They may launch an advertising campaign to generate greater brand
awareness or implement a short-term promotion with a finite ending date. A
promotion is often linked with pricing, such as advertising a special sale price for a
limited period(Chris).
3. More Distribution Channels:
A company can attempt to increase market penetration by increasing the methods it
uses to get products into the hands of consumers, making them more readily available.
For instance, car2go could establish some official car rental offices that may continent
for the customers(Chris). Apart from this, the company should have the relationship
with some car selling companies and get the permission to leave their cars there.
4. Product Improvements:
Making product improvements can be used to create new interest in a stagnating
product or to offer an extra benefit when using it. Consumer products manufacturers
have often used the "new and improved" claim to entice customers to give a product
another chance or to improve the perception of quality. Companies can also change
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the product's packaging to give it a more modern design that might appeal to a
younger customer base(Chris).
 Market development
1. Expanding Geographically:
Geographical expansion works well for a company that wants to expand its service
territory because it needs a physical location to serve its customers. Many of the big
boys of business, including McDonalds, Wal-Mart, and Home Depot, have exported
their operations to other countries(strategically speaking blog). For car2go, the
company can expand more areas in airport, universities, or other cities that do not
have car2go.
2. Reaching into new market segments:
You can also grow by reaching a completely new set of customers or market segments.
This area is such a popular growth strategy because you leverage the products and
services you already have developed.
Product development
New product development is an important way for businesses to stay ahead of the
competition and continue to appeal to the changing needs of existing customers. In
addition, new product development can open up new marketing channels and help to
increase market share. For instance, car2go may introduce new types of vehicles, such
as SUVS, 4 seats cars, or small trucks.
1. Customer Needs:
A classic strategy for product development is simply focusing on customer needs.
"Necessity is the mother of invention" they say, and this is certainly true when it
comes to new product development strategy. Having a problem and coming up with a
solution to solve that problem has generated a wide range of new product ideas from
the wheel to the Twitter applications that pop up virtually every day. Spot a need and
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then take steps to fill it(Leigh).
2. Brand Extension:
Brand extension is a common strategy for new product development. Brand extension
simply involves using a commonly known brand name to introduce another similar,
but different product(Leigh). For instance, car2go only have smart cars, so they can
bring different kinds of brand, like BMW, HONDA, TOYOTA, and so on. This
changings will face different needs for customers.
3. Technology:
Companies that can strategically identify opportunities to capitalize on technology to
provide products and services more conveniently, less expensively and in new ways,
can stay ahead of the curve and avoid the unfortunate situation of having their
products and services become obsolete(Leigh).
Diversification
A product diversification strategy is a form of business development. Small
businesses that implement the strategy can diversify their product range by modifying
existing products or adding new products to the range. The strategy provides
opportunities to grow the business by increasing sales to existing customers or
entering new markets(Lan). As car2go, the company may introduce different types of
cars with different brands in different location in BC.
4. Marketing and Product Objectives
a.
Objectives
In order to help Car2go grow their business in British Columbia, the current
objectives include establishing a presence in the premium in the car rental industry by
providing different kinds of vehicles, good customer services, and reasonable price.
Brand awareness will be improved by a comprehensive social media promotion plan,
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own official websites for B.C. Also, the customer loyalty will be built by points’ card
and discounts. In addition, sales objectives involve attaining sales of $2,000,000 for
year one. At the end of first year, customer evaluation will be accessed, and the
company is going to make some changes to increase customer satisfaction. Besides,
the number of people who sign up for Car2go Company’s membership would be 360
for the first year.
b.
Target Market
Car2Go will primarily target young urban people whose age is from20-35 living or
working in Vancouver. The individuals will be university graduates working in a
professional setting. The company will provide new vehicles, such as SUV, 4-seats
cars, and small trucks. Due to the differences of income, we offer different reasonable
price for different vehicles. Also, they are appreciative of cultural diversity and
admire social responsibility.
c.
Points of Difference
Basically, Car2go offers exclusively two-seats cars. It only fit a small group of people.
According to this restriction, car2go is going to corporate with different car
companies to bring new types of vehicles, so the customers can have more choice.
Also, car2go will have a partnership with Cineplex. The customer can have free
movie tickets by consumption in car2go through point’s reward. In addition, they
provide face-to-face service to solve the problem and delivery the cars when the
customers cannot reach their vehicles or in trouble.
d.
Positioning
The image is used to identify the brand Car2Go, a subject of public interest. The
entire logo is used to convey the meaning intended and avoid tarnishing or
misrepresenting the intended image. To appeal more customers, the company will
communicate through the new official websites for BC and social media, for instance;
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car2go will post some events, campaigns, and reward information.
5. Marketing Program
 Product strategy
a. Product/Service Components
i.
Product
Offer Smart vehicles that are easy to use, technologically innovative and
environmentally beneficial to achieve car2go’s marketing and strategic objectives.
ii.
Service
The website and Go2Car application(app has already available on ios and
android)provide up-to-date information on rates, user guidelines, quick rent services
and vehicle locations that save the consumer’s time. Registration is designed for
simplicity, security, and speed for maximum ease of use.
b. Branding
i.
Brand Personality:
car2go will position itself as a flexible, innovative, and eco-friendly alternative to
owning a car in Vancouver. The capacity for one-way trips, no reservation
requirement, charging by the minute, and undesignated parking provide flexibility.
Innovation is delivered by advanced telematics, onboard touch screen, GPS, Go2Car
mobile application, and easy access license chip. Offering small, fuel-efficient
vehicles and pursuing an electric fleet achieve environmental differentiation.
ii.
Brand loyalty
Car2go membership card is a onetime life card without any monthly fee. People can
reserve their car when they need. We are much consider about user Experience, We
always believe positive feedback loop will translate in to a product demand by
building a familiar relationship and sense of ownership with the brand.
iii.
Brand Name
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“CAR2GO” implies quick service that will get you wherever you want to go,
acknowledging the target market’s need for instant gratification. car2go colors are
distinct from other brands and cover vehicles to promote brand recognition.
 Pricing strategy
a. Pricing factors considered
Price consists of a one-time registration fee and a rate based on usage time:
$0.38/minute, $13.99/hour, $72.99 for 24 hours and $0.45/km after 200 km. car2go
uses “odd pricing” based on the psychological theory that it will elicit a greater
demand for the product.
b. Pricing objective
To support the goal of becoming the first choice alternative to owning a car and to
translate 35% of Zipcar and modo users into car2go users.
11,000 (Zipcar) + 7,000 (modo) = 18,000 total members. car2go is committed to
attracting 6,300 of these members.
c. Special adjustments
Provide car2go gift card which people can choose different price of card and they
can get $5 discount if they purchase up to $100 every time. The car2go gift card is
flexible to recharge and do not have minimum charge.
d. Quarterly target revenue projections for the first 12 months
Increase total revenue per member per period by 5% in the first 12 months.

Revenue per member is estimated at $75 per period (Zipcar, 2011)

To increase by 5%, next period’s usage minutes must increase by 11
minutes per member.
i.
August 2013- October 2013: $472,500
ii.
November 2013-January 2014: $496,125
iii.
February 2014-April 2014 $520,931
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iv.
May 2014- July 2014: $546,977
 Distribution (Place) strategy
a. Marketing Channels
The marketing channels will involve the user experience and also a good service.To
maximize product exposure by securing designated parking spots where the target
market lives and works will achieve high visibility and awareness, contributing to all
three of marketing objectives.
b. Specific location and rationale
 Service Area
i.
The current operating area does onlyUBC campuses, downtown Vancouver,
and North Vancouver.
ii.
Other car sharing companies operate Downtown, North Shore, Burnaby,
New Westminster, SFU, and UBC.
iii.
Plan expand car2go service area, will operate Burnaby, Richmond, New
Westminster and Coquitlam in next 3 years.
 Promotional strategy
a. IMC objectives
i.
Objective
car2go’s promotion objective is to combine interactive and traditional media(Youtube
ads, TV ads and poster on bus or stations) and become the first choice alternative to
car owning and capture 20% of the current market share.
ii.
Loyalty
Car2go's primarily job is to create a good relationship between Car2go and Customers,
The purpose is try our best in order to satisfy customer that make these people trust,
believe and like Car2go. These customer will threat car2go as one part of life. When
they consider rent a car, car2go will always the first choose.
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b. Target Audience
“Young Urban Singles, 20-35, living and working in Vancouver”
“Young Urban Singles, 20-35, living, working and studying in UBC campus”
“Young Urban Singles, 20-35, living and working in North Shore”
Sum up Car2go's currently target audience is young urban singles, car2go is the car
sharing company which provide innovation, quality, eco-friendly and integrity.
However, when other age of people get the idea and concept of car2go. They may
become car2go's next target audience.
c. Allocate budget
The whole $50,000 budget will be divide as 5 parts. First, TV commercial will cost
$19,000.In addition,Youtube In-Stream ads will cost $0.04 per viewer (Search Engine
Watch, 2012). Transit/Bus shelter Posters cost $50/shelter ad (LinxPrint,
2013).Sponsored tweets and Facebook ads will also cost $5,000 per year. Finally,
car2go plan to cooperate with Cineplex cinema, the total cost for this part will be
$15,000.
d. Promotional Program
car2go will primarily communicate through TV ads Facebook, Twitter, Transit/Bus
shelter Posters and YouTube. Videos will include commercials and customer-created
content to be shared through friends, create buzz, and encourage word-of-mouth about
the brand. Poster will include brand name, logo, basic concept about car2go(like
eco-friendly, touch screen ect ) These channels allow car2go to manage the message,
update instantly, and are inexpensive except TV ads. And car2go will have a
partnership with Cineplex. The customer can have free movie tickets by consumption
in car2go through point’s reward.
e. Rationale
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Social media and electronic newsletters are utilized, as the target market responds
well to car sharing branding.Online and viral marketing costs will increase after the
first year in order to sustain online engagement. In addition, when car2go accumulate
more and more customer, Sales and marketing expenses will decrease as a percentage
of revenue in the future.
6. Budget
a. Year 1 sales projection
YEAR 1
Attracted customers
August 2013- October 2013
6100
$472,500
2013-January 6250
$496,125
February 2014-April 2014
6390
$520,931
May 2014- July 2014
6510
$546,977
November
2014
(units)
Projection ($)
b.Operational budgetfor incremental, growth-related business
Volume
Total Budget (Year 1)
Field Team Salary
20 new customer offices
$100,800
Customer gift Cards
10,000
$3,000
Website
1 Time
$5,000
Website Maintenance
Once a month
$1,000
charity
1 Time
$20,000
CSR-environment theme
activity
1 Time
$10,000
Volume
Total Budget (Year 1)
TV commercial
N/A
$19,000
Sponsored Tweets and
Facebook Ads
N/A
$5,000
Youtube In-Stream ads
$0.04 per viewer
$6,000
c. Promotional Budget
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Cineplex cinema
N/A
$15,000
Transit/Bus shelter Posters
$50/shelter
$10,000
7. Evaluation and Control
By reviewing and interpreting business reports in both financial and managerial
accounting approach, we will recognize company’s performance to make the
evaluation. In advance, we will have different results to make any adjustment for
different departments. Firstly, Car2go Company would have financial accounting
report in order to present the company operating condition for external users. For
example, by looking at income statement, we will have the list for Car2go Company’s
revenue and expenses, in order to calculate the gross margins. By viewing at cash
flow and balance sheet, Car2go Company will clearly know its arrangement of
property and debts. Moreover, it will also show the dividend and share’s price to
indicate Car2go Company’s popularity and profits. On the other hand, while
observing the managerial accounting report, Car2go Company will have the formal
analysis reports for internal users. To avoid from the perceptions of social network, it
is significant to have well organized inventory and cost management to control good
and service’s quality and quantity.
In addition, Car2go Company already has the computer system to record members’
data and contact information; therefore, it is able to record the number of the
memberships that is signed up per year. By calculating the number of Car2go
members, the company can know its reputation and expansion.
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Bibliography
Chris, J. (n.d.). example of penetration strategies. Retrieved from Chron:
http://smallbusiness.chron.com/example-penetration-strategies-11699.html
Lan, L. (n.d.). product diversification strategy. Retrieved from Chron:
http://smallbusiness.chron.com/product-diversification-strategy-40375.html
Leigh, R. (n.d.). examples of product development strategy. Retrieved from Chron:
http://smallbusiness.chron.com/examples-product-development-strategy-3219.
html
strategically speaking blog. (n.d.). Retrieved from my strategic plan:
http://mystrategicplan.com/resources/how-to-choose-a-market-development-s
trategy/
Zipcar (2011, May 13) Form 10-Q Quarterly Report.
http://ir.zipcar.com/secfiling.cfm?filingID=1193125-11-139687
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