Analysis Aviss Existing Marketing Strategy

Avis jump up at Vietnam market from June 2009. They stand at one of leader positions in the car rental industry. Avis is always confident that they would bring to customers “a consistent high quality and recognizable service with our dedicated team of employees” [1] . In Vietnam market, Avis is developing tremendously two fields which are short term leasing and long term leasing.

In this report, I will analysis Avis’s existing marketing strategy and value creation process by marketing mix (4Ps) to help stakeholders to have an overview about advantages and disadvantages of Avis’s marketing strategy. From the research of Avis that I showed at previous part, I would give the company recommendations about their marketing strategy to increase their market share, profitability,value creation, and sustainability.

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INTRODUCTION

Avis always has been known as a strong brand name in the world. They have more than 3000 offices in Europe, Africa, the Middle East and Asia and 2000 offices in the United States, Canada, Australia, New Zealand and the Latin America/Caribbean region.

In 1970, the first office of Avis was opened in Asian in Hong Kong. Through 10 years, Avis developed steadily with many new locations in Singapore, the Philippines, Pakistan, Malaysia and Indonesia. Recently, the company opened more operations in India, China and Taiwan in 2007. Avis realized that Asia is a very potential market, so that they develop their network bigger and bigger in here. At the moment, Avis has over 235 offices in Asia in countries below:

Bangladesh*

Indonesia

Malaysia

Singapore

Brunei

India

Mariana Islands

Sri Lanka

China

Japan (Sales Office)

Pakistan

Taiwan (Sales Office)

Guam

Korea (South)

Philippines

Thailand

Hong Kong

Macau

Sakhalin (East Russia)

Vietnam

At present, Avis seems to be the most popular international car rental brand in Asia with more than 34000 cars and about 2500 staffs in all operations. Long term car leasing is a type of business which Avis want to focus on. The kind of leasing has many special benefits and services which the company would bring to customers when they choose it.

Current Situation of Avis

Access the existing marketing strategy of Avis

I would analysis 4Ps to identify the existing marketing strategy of Avis:

Elements:

Avis’s long-term car rental services

Product (Service)

If you need a car in Vietnam for an extended period of time (1 year or more) but do not wish to commit yourself to buying one then Avis car leasing is for you!

Avis can bring to customers benefits and services:

Lower monthly payment compared to car rental

Choice of your preferred vehicle make, model, color and specs

Use of a professionally trained English speaking Avis driver

Convenience – insurance, road tax, servicing and maintenance all taken care by Avis

Complimentary replacement vehicle during vehicle servicing

Access to a dedicated Avis Car Leasing Account Manager

Complimentary 24 Hours breakdown assistance

Exclusive worldwide Avis car rental discounts for travel and home leave [2] 

Place (Distribution)

Avis has over 5000 locations in the world and they have two offices in Vietnam market.

Price

Avis is one of the strongest brand names in the field and their services are always standing at the top, so that their price cannot cheap.

Promotion

Avis is a popular brand name, so that they always receive many attentions from media although they don’t need to promote too much. On the other hand, Avis also advertise their services on social networks like Facebook…

It can be seen easily that Avis is using differentiation marketing strategy after analysing 4Ps.

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The marketing strategy of the company is differentiation that means Avis want to make differentiations in the Vietnam market, to compare with their rivals.

As can be known, Avis not only can bring to their consumers many choices of luxury car which includes benefits and high quality services, but also can create some special package services for customers in entertainment and business such as Gold Package, Hanoi tour package, Avis Vietnam luxury Halong Bay cruise package. They are excellent services to help consumers to visit wonder places or tourist destinations of Vietnam. Especially, Avis has list of all golf courses in Vietnam to give customers to choose and they also are the leading cruise companies in Vietnam jointly offer you the Luxury Halong Bay Cruise Package.

In US market, Avis apply the differentiation marketing strategy to develop as well. As can be seen, Avis in US has not only given care rental but also bought their car and they have a service to make their customer interest in which is “ultimate test drive”. The service gives consumers chance to try driving a car before they decide to buy it with many benefits:

“Thousands of low-mileage, late-model vehicles for sale

More than 75 well-maintained makes and models

Take Avis’ Ultimate Test Drive for two hours – or up to 3 days

Low, pre-posted pricing – no negotiation

Try before you buy” [3] 

In my opinion, it’s really a good marketing strategy which is different and can attract customers come to Avis.

Identify the value creation progress of Avis

I would use value chain to analysis value creation progress of Avis Vietnam:

Inbound Logistics

Avis is exist and developing through many years, so that the relationship between the company and car suppliers or partners is very good. However, there are many Vietnam’s automobile taxes which are very high. Therefore, Avis should concentrate more about this point to reduce the cost.

Operations

Resource inputs are not only luxury cars. People are a resource especially in service industries. Therefore, Avis trains staffs to build trusted consumer relationships by the premium service.

Outbound Logistics

Avis product their services through network operators and system of offices in the world. The customer can book schedule by internet or offices. Any car was test carefully before serving customers.

Marketing and Sales

Avis group uses advertising on network social like Facebook, promotions, etc… to inform customers about their services. Besides that, Avis builds belief of customers by providing best service and allowed them to segment the market effectively.

Service

Avis supplies the best services to customers and the addition benefits with it. It is discount, insurance car or monthly check, repaired car, and so on…

Support activities

Procurement

Acquire the resource inputs to the primary actives: Avis always supplied quality cars for their services. In addition, the company will be preferred to pick up the customer at airport by Vietnam airline or received tourist transport contacts from Vietnam national administration of tourism [4] .

Technology development

In my opinion, Avis certainly had some research about Vietnam market and demand of Vietnamese people. Therefore, they made a different thing with other market which is car rental including driver. In addition, they also don’t buy their car at Vietnam market like others.

Human resource management

Avis always hide good drivers who even know to speak English. Avis always want to ensure about their quality services so that the attitude of employees is very important. Avis usually trains them carefully and also provide the chance to employees study and learning to develop their skill.

Quality Management

Avis believe that corporate sustainability can only be effective if it embraces all steps of the value chain. This is why the Avis not only sets the highest standards for itself but also expects suppliers and partners to meet ecological and social standard.

Competitive advantage

Resource based view (RBV)

Hollensen, S. (2003) defined that “long term competitiveness of a company depends on its resources that differentiate it from its competitors”, so that the first step, I would analysis tangible resource and intangible resource of Avis

Tangible:

The quality of Avis car rental.

Have more 5000 locations in the world. In Asian, Avis has over 34000 luxury cars for leasing and a large human resource with 2500 employees.

Intangible:

Strong brand name in the world.

Avis has research about Vietnam market before jumping up.

Experience in car rental business through many years

Special services for any locations

Skill and knowledge of employees.

Avis has been active in this field for over 40 years, so they have a lot of experience in the car rental field. In addition, the core competence of Avis which is created by the combination of all tangible and intangible resources above, Avis would have a big competitive advantage in Vietnam market.

Market oriented view (MOV)

There are three main elements of environment which includes customer, competitors, environment; Avis has to adapt to create differentiations from their competitors.

Customer: Vietnamese people has trend to own car, instead of using car rental services of Avis. Avis should have more strategies to stimulate customers to use services more.

Competitors: Hertz, Enterprise, etc… are Avis’s major competitors. In Vietnam market, Avis would be competitive by smaller company who set the lower price for their services.

Environment: Long-term car rental is preferred for the kind of customers who usually has to use car but don’t want to pay a large of money to buy in a period. Especially, the service including driver to help their consumers not to worry about Vietnamese traffic laws which is very complicated.

All these changes to suit with environment create differentiation for Avis’s services. Base on analysis RBV and MOV, it founds that the core competence and those differentiation create competitive advantage for Avis in Vietnam market.

PESTLE analysis

Political – Legal Environment:

There is only one Party nationally in Vietnam, so that they have a stable political situation. In addition, the Government has had reform to develop suitably with international and nation situation at any period. Government also builds the Law of Foreign Investment to encourage organizations to invest in Vietnam market. However, the traffic in Vietnam isn’t good, especially in Hanoi and Hochiminh with too large vehicle density, so that the Government has to limit the number of transport, especially car. Therefore, Government brings out policies and law (high taxed rate) applies for car, especially imported car.

Economic

The Vietnamese economy has been developing rapidly and in 2008, World Bank published that “Vietnam is one of the best performing economies in the world over the last decade”. Vietnam has joined WTO in 2007 and it’s quietly opened for foreign company to run business in the market. On the other hand, GDP in 2009-10 in Vietnam grew less than the 7% per annum average achieved during the last decade and the inflation rate increased from 7% to 9% because the global economic which affect to Vietnam, is unstably. Therefore, it’s really a opportunity with Avis because purchasing power would be decreased which means citizen wouldn’t dare bring a large of money to buy car and they can choose Avis’s services to save money. It can be a big chance which Avis should concentrate on. (See appendix 1)

Social culture

According to CIA, Vietnam is really a densely populated country with the population is over 90 million by 2011. However, the Vietnamese people are concentrated mainly in big cities such as Hanoi, Hochiminh…which is always potential markets for Avis. That’s reason why Avis opened two operations at the cities. The demand for using car of Vietnamese people is increasing rapidly, but they usually want to own one instead of renting car. That is a big different about culture among Vietnam and others.

Technology:

Nowadays, technology is focused by all of the governments in the world, media tools are developing more and more, especially internet. We can update all of news every time in everywhere. As can be seen that, media usually affect to customer’s buying behavior. In 2011, VNNIC published that 42% of poplar use internet as daily communication. We can be sure that advertising and promotion on internet network would help Avis to have a big advantage in marketing. In fact, Avis has promoted their advertising for the services in Vietnam market on their website and Facebook which can be connected easily with customers.

Discussion

SWOT analysis

Strengths

Avis is a strong brand name in car rental business in the world. They have developed their business very successful through over 40 years, so that their experiences in the field have been acknowledged. In addition, Avis has a large network with over 5000 locations in the international market. With over 34,000 cars and over 2,500 employees throughout the region, Avis is the leading international car rental brand in Asia and Avis really has good websites, retailer stores and operations around the world. The company also has many kinds of luxury cars to help their customers to choose. To use the long-term leasing of Avis, consumers would receive many benefits and services from Avis with the highest quality.

Weakness

Avis just appeared at Vietnam market in recent, so that they have only two operations at the country (at Hanoi capital and Ho Chi Minh City). The demand for long-term rental of Vietnamese people is not high and to change their minds is a difficult mission with the company.

Opportunity

Vietnam always is a potential market for almost of luxury products or services. The standard life of Vietnamese people is increasing more and more, so that to use new services or products can be interested by them. In addition, the service of Avis can help them to save their money although they can still use a luxury car. On the other hand, Avis has not many competitors who can bring to customers good services like them at Vietnam market.

Threat

Vietnamese Government doesn’t encourage increasing the number of car in circulation at Vietnam, especially at Hanoi and Ho Chi Minh because the traffic congestion in the two cities is very high. Avis also should care about their competitor – Satsco [5] that is an indigenous company.

The key strengths and weaknesses of Avis existing marketing strategy

Strengths

Special services to attract customers

Have many promotions with high quality services.

Use professional website and Facebook to advertise

Co-operated with many famous partners in Vietnam market.

Weakness

Just only two operations in Vietnam market (in Hanoi and Hochiminh) while Danang and Haiphong… are also big cities which are potential markets as well.

Avis don’t publish their price on public, so that the customer will be lack of information.

They don’t advertise on other media like television, newspaper…which are easy to attract customers.

Recommendations

Segmentation, Targeted, Positioning.

Segmentation:

The main customers of Avis’s car long-term rental are both male and female who have at least average income or small company because they have demand to use car but they haven’t enough money or save their money. The largest number of customer would focus on big cities such as Hanoi, Hochiminh, Haiphong, Danang… However, the economy is developing, so that the segmentation in Vietnam market would be larger.

Targeting:

Socio-demographic

Age: over 25

Income: Above $2000/month

Education: graduated, post graduated

Occupation: Businessman, artists…

Geographic: all three regions.

Social class: upper-middle, lower-upper, upper-upper

Behaviouristic

Loyalty: moderate and loyalty

Shopping habit: want to use high quality services.

Psychographic

Interest: class asserting

Value: Living standard, convenience

Benefit sought

Product features: attractive, unique, promotions, benefits including.

Positioning:

Because of the high quality service, price of Avis’s services wouldn’t be cheap.

High price

Avis’s car rental

Low quality High quality

Low price

Growth strategy

MarketMarket penetration; (for growth) or consolidation (to maintain position) or withdraw

Product development

Diversification

Market

Development

Present

New

Present

Product

New

Ansoff’s matrix

Avis has already had two operations in Hanoi and Hochiminh in Vietnam. Avis should think about expanding stores in other. Therefore, market development is suitable strategy for company at this time.

Objective and Goal of Avis’s car long-term rental

Objective: Lead to the best car rental service in 2014

Goals:

Increase revenue by 30% in next two year

Have operations in Danang in 2013, Haiphong in 2015

Gain more 10% market share at the end of 2013

The detail plan would be present at Appendix 2.

Marketing strategy and program (Marketing Mix)

Marketing mix includes 7Ps which Avis has to apply in their marketing plan for achieving.

Product:

“Product” refers to the goods and services which firms offer to their customers. Firms must place sufficient importance to the product/service as well as the other aspects associated with the product that attract customer attention. [6] 

Avis’s car rental was created to serve customers who need to use car but they haven’t enough money or want to save money for other works. Avis always understand demands of customers in Vietnam market. Therefore, in addition to normally benefits in services, Avis also make a new different service including drivers for the market which is very necessary with traffic conditions in Vietnam.

Price:

The price has always been regarded as an important competitive factor in attracting customers. The price of Avis is not published on their anywhere but the service of a famous company like Avis can’t be cheap. Therefore, Avis should concentrate on the issue because the average income of Vietnamese people was just about $1.100 (2010).

Promotion:

Promotion plays an important role in company’s marketing strategy. Firstly, we have to decide what components of the communication mix that should be used in the plan.

There are many media that Avis can choose to promote: Television, Radio, Newspaper or Magazines, Internet…In addition, Avis could advertise their service through internet networks such as Avis’s official website, online newspapers, forums, social network (Facebook, Twitter, etc…). IT is developing more and more at the moment, so that it could be the most effective promoting channel with very low cost for Avis. On the other hand, Avis should bring out discount policy or giving gift… which would attract more customers. (You can see more detail in Appendix 3)

Place:

At the moment, there are two ways for Avis to connect with customers. One way is that their customers can come to Avis’s operation directly. Avis has two operations in Hanoi and Ho Chi Minh for transaction. If customers haven’t time or are so far from the company, they can choose contact with Avis indirectly through their website. It’s also comfortable and convenience.

In the future, Avis should set to open more operations in other big cities of Vietnam to expand their market in Vietnam.

People

People are one of the key elements to help the organization to achieve. In this case of Avis, sale forces and drivers would direct communicate with customer so they create the image of Avis. Therefore, to train staffs is important mission with Avis.

Process

Avis should invest in R&D project for better understanding customer need and R&D is also help Avis gathering customer feedback because as can be seen that customer communication is an important process with the company. Avis also has to provide information (especially about price) to customers on their website and public through advertising.

Physical evidence

The car using in rental always need to be clear and comfortable, luxury, elegance to attack customers. In addition, drivers should wear uniform which can create imagine of Avis brand and it’s also show that the attitude serving of Avis is always professional. The customer can always believe in the company.

CONCLUSION

Car rental is a new type of services, especially in Vietnam. Vietnamese people are not really familiar with long-term leasing. However, with new marketing strategy, I believe Avis car long-term leasing would be more preferred and Avis would still lead to the first place in car rental industry not only in others but also in Vietnam market.

World count: 3297

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