Car2Go is a fresh way to look at how people can get to point A to point B! It’s a new way to look at car sharing. The makers of Car2Go looked at a major environmental trend and found a way to make money out of it. With increasing gas prices and negative externalities such as pollution, congestion and increased city parking costs, owning a car has become a lot more expensive. This created a niche in the marketplace and we have seen a huge growth in car sharing companies. Just like time share apartments, car sharing companies share the cost of owning a car, with only a small fraction of the total financial costs and burdens. With about half of the population of British Columbia located in Vancouver, it was an easy choice to open up a location in one of Canada’s greenest cities.
Car2Go enters the car sharing industry with an environmentally friendly fleet of cars. They only have Smart Fortwo cars so they are excellent for the environment. Car2Go offers consumers cars which are groovy, technologically advanced, easy to use, and they are environmentally friendly. If you want to go entirely green, Car2Go has some electric cars too which does not give off the bad chemicals that combustion engines do. The name “CAR2GO” provides and represents the quick service you need, whenever you need it. Car2Go utilizes bright brand colours for easy recognition.
Car2Go, like every other company, has a target market. Young adults of Generation’s Y&Z are the main targets and marketing is distributed accordingly. There is a strong online presence on social networking sites, such as Twitter, Facebook, and YouTube. However we believe that Generation Y has a much larger disposable income since there is a lot less students and a lot more individuals are working with their own careers. These impulse buyers, bargain hunters, and those who wish to obtain status by driving a groovy new car that reduces harm to the environment. There are roughly 240,910 people in the demographic area of Vancouver. (Statistics Canada) The population density consists of 1,856 people per square kilometre and Vancouver has a total land area of 1,150 square kilometres. With large quantities of people in such a small area means that the city is tight on space. Car2Go’s entire fleet of cars are all Smart Fortwos, which makes parking and getting around the city a breeze. Car2Go also targets small families who have one car but don’t want to get a second car for economic and space issues. It’s perfect for going to pick up and drop off children to school or to extracurricular activities. Growth is expected in the car sharing industry especially in the metropolitan areas such as it is driven by innovative new companies improved services, diversification of products to share, and increase competition with another entrant to the market. The demographic of Vancouver will defiantly influence membership sign-up in a positive way because the cars are marketed toward people with disposable incomes and small families in need of a second car which they can use once in a while and not get dinged from expensive insurance fees and such.
Vancouver is a very trendy city and very environmentally conscious. Vancouver’s mayor even claimed that Vancouver aims to be the world’s greenest city in the world by 2020. There is an increased focus on environmental sustainability in Vancouver especially among the target group car2go is focusing on. Car sharing helps to reduce the carbon dioxide emissions, the number of vehicles per household, and also saves time that you would of travelled by yourself through public transit. Car2go uses fuel-efficient, low-emission Fortwo vehicles. Car2Go also give consumers an option of renting an electric car. If you rent the electric drive Fortwo car, it does not emit any CO2, carbon monoxide, soot, or any particular matter or pollutants which are harmful to the earth’s atmosphere. The Car2Go system is very flexible and eco-friendly which is very consistent with what this age group is interested in. The rate structures appeal to the age group and the smaller cars are easier on the wallet, which is what is needed for this age group. This generation has a focus on obtaining the latest gadgets, so they will be interested in the touch screen technology which is provided with every car. This novelty advantage is unmatched with any of Car2Go’s competitors. The demographics will positively influence Car2Go’s sign-ups because it is targeted towards a generation who is trying to get the most environmentally friendly products available.
Car2Go has some stiff competition. The major competitors in Vancouver’s car sharing services are Zipcar (an American company), and Modo: the car co-op. These two competitors have prospered because they have an oligopoly in the Vancouver car sharing industry; as a result, have been able to set the standards for convenience, location, and competitive pricing against each other comfortably. However, with new entrants to their industry, they can engage in a costly competitive pricing strategy to run car2go out of the industry, or allow them to enter as it will already be hard for Car2go to enter a new market with low brand recognition and market share. Car2go beats Modo because Car2Go doesn’t charge their customers for gas. In order to gain this market share, car2go has to offer something of value to customers which they do not already have: innovative new products, flexibility, and environmental benefits. Car2Go has two direct competitors, Zipcar, which is currently the market leader, has 11,000 members and 8 different types of cars. The other one is Modo, which was the first car sharing company in Vancouver. It has 240 cars available and it caters to 7000 members. Car2Go also has a few indirect competitors also, like rental car companies. There are 8 different car rental companies in Vancouver, like Enterprise and Hertz. They typically charge $35-$130 a day to rent a car. Taxis are also a form of competition since you don’t even have to drive and there are 4 taxi companies. Public Transit is competition also because Vancouver has an excellent public transit system. You can get everywhere downtown and you can take public transit all the way to YVR. The prices are fairly cheap as it costs about $2.50 - $5.50 depending on how many zones are travelled. The problem is that public transit is time consuming. Car2Go’s pricing strategy will be used to become the first choice alternative to owning a car and to transfer Zipcar’s and Modo’s customers to them. Providing economic advantages to customers, Car2Go’s easy pricing are competitively priced to enter and grab consumers attention and draw them to Car2Go. Zipcar’s reputation might negatively influence sign-ups because they have more than one type of car and they don’t charge the customer for gas either.
Car2Go definitely did not forget to put in some technological advancement into their product. To enter the car all you need is a card which is provided to Car2go, and you just wave it in front of the reader and the car will open for you. Another strength in Car2Go’s strategy upon entering the car sharing industry in Vancouver, Car2Go’s entire fleet of Smart cars have onboard telematics which track the cars locations, fuel level, and distance to the customer. Because Car2Go is marketed towards the younger generation, Car2Go has accessible online and mobile applications to help with customer service. Moreover, each car is equipped with a GPS to help with easy navigation within Vancouver. These technological benefits will positively influence membership because people are very interested in having the latest and greatest gadgets at their disposal.
Car2Go entered the marketplace at a good time as there are some economic crunches happening. The costs of owning and maintaining a car are growing exponentially and the industry is expected to grow. (Stafford, Katie, 2012) Along with growing maintenance costs, gas prices have dramatically risen with the new introduction of the carbon tax, thereby, increasing the cost of owning a car. (Graph 1) Vancouver is also pouring money into its new goal, which is to become the greenest city in the world by 2020. Space for cars keeps disappearing due to the bike lanes which keep popping up all over Vancouver. Not to mention Vancouver has very narrow streets in the first place. This downsizing positively influences sign-ups for the company because all of their cars are nice and compact so getting around is easy.
Car2Go is a smart company which tries to tiptoe around a few by-laws so their customers have an easy time finding places to park or drop off their car. Customers can park their cars in areas with signs that read “No parking except with permit” or “resident only parking”. The same goes with parking in North Vancouver, you must follow the signage on the roads but you are allowed to park in a place which otherwise would be restricted for residents. If the driver of a car breaks any sort of traffic law or if they get the car towed, they are responsible for the fines they face. This will help positively influence membership sign up for Car2Go since you have extra benefits when it comes to parking.
Works Cited
Stafford, Katie (2012) Car2go Poised for Growth in This Spring. Canada Newswire Retrieved from http://www.newswire.ca/en/story/940701/car2go-poised-for-growth-in-vancouver-this-spring/
Statistics Canada http://www12.statcan.gc.ca/nhs-enm/2011/dp-pd/prof/details/page.cfm?Lang=E&Geo1=CMA&Code1=933&Data=Count&SearchText=Vancouver&SearchType=Begins&SearchPR=01&A1=All&B1=All&TABID=1
http://www12.statcan.gc.ca/census-recensement/2011/dp-pd/prof/details/page.cfm?Lang=E&Geo1=POPC&Code1=0973&Geo2=PR&Code2=59&Data=Count&SearchText=Vancouver&SearchType=Begins&SearchPR=01&B1=All&Custom=&TABID=1
Greenest City 2020: A Bright Green Future. City of Vancouver Retrieved from http://vancouver.ca/green-vancouver/a-bright-green-future.aspx
www.car2go.com
www.zipcar.com
www.modo.coop
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