self driven cars b plan
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Mehta Car Rentals“Drive The Luxury”
Mehta Car Rentals Overview
Overview• Indian Travel Industry is booming over the last decade, the Indian economy has grown consistently at
an average rate of 6-7% per annum1.• Convenience of travel arrangement using internet: Riding on the digital economy rise, travel portals
offering travel packages, hotel stays, etc., have eased the booking process for travel. This has ensured that there are competitive tourist friendly offerings available in the market.
Our
App
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The strategy would be to target: Young Urban population - prefer
independence over comfort Foreign Tourists - Safety, the biggest
concern NRI – Prefer travelling in high-end cars Corporates – Short on time and on
dynamic schedule
1: Source KPMG
Operational Specifications
Infrastructure Considerations
• Two Parkings with 35 cars capacity at Noida & Gurgaon
• One Head Office in Delhi• Regional offices at Jaipur and Amritsar
• Outsource the call centre for telebooking
Collaboration Considerations
• Purchase 50 sedan cars with average cost of Rs 7 lacs
• Tie Up with multiple independent car vendors for 200 sedans and 30 luxury cars
• Collaboration with Hotels, Resorts, Travel Agencies & Hospitals
Manpower Considerations Hire 30 drivers to get isolated cars back to Delhi
Car Rental Industry Five Force Analysis
Competitive Rivalry
Bargaining Power of Buyers
Bargaining Power of Suppliers
Threat of New Entrants
Threats to Substitute
Low• High Capital Requirement• High Economies of Scale
Required (Medium Margin-High Volume)• No major legal constraints• Slightly risk zone • Large Network required
• High Product to Product substitution• Several potential substitutes for product itself• Multiple factors such as convenience and
availability comes to play in travel domain
High
High
• Several players in the market• Limited cost differentiation
Low switching cost
Med
ium
• Dependence on external players for cars • Chances of suppliers
capturing the end- customers• The external partners in
the most cases are relatively small firms, with limited individual bargaining power
Resulting rivalry scenario• High competition in the over all travel industry
• First mover advantage • Focus on distribution channel optimization
Objective – Customer Profiling
Analyse the most viable age-group
population for LOCAL
POPULATION1
Customer Profiling – To define the customer segment for Mehta Car Rentals
Define target potential -
tourists coming to Delhi
FOREIGNERS & NRI
2
Analyse the new upcoming market
of
MEDICAL TOURISTS
3
• Total Population (Delhi)– 6222K• Age Group 25-40 (Approx. 25%) –
1555K• In this age group 10% hire cars
**= 10%• Out of this 5% will prefer to rent
cars without out drivers **• TARGET POPLUATION = 75,000 Hence 6000 Trips per month
• Total Annual Foreign Tourist in Delhi – 2 Million*
• Segment of tourist which prefer to hire cars (10%) = 2 lacs
• Segment which would prefer to hire luxury cars without drivers (25%)= 50,000
• Total number of cars =12,500• Total trips per month ~ 1000
• Total Medical Tourists visited Delhi = 0.1 Million 1
• Segment which will prefer to hire cars without drivers (10%)=10,000
• Total number of trips per month ~900
** Assumed for calculations * : Sans Medical Tourists 1: Census Data 2011
Pricing Strategy
Sedans (Indigo, Logan, Manza & Desire)
Pricing for SedansAverage full day price charged by local vendors = 2500*Number of cars planned to hire from local vendors = 180 Number of cars planned to be purchased = 50 Price to be paid to local vendors =2500-500=2000 (Cost of driver + diesel deducted)Cost to customers for hiring sedans = 2500
Pricing for Luxury CarThe fixed component of the pricing will depend on the type of car requested.The customer will be charged 10% extra from the market standard price in return of the independence and we will pay 10% less to the vendor deducting drivers fee and diesel cost.
Net Revenue: (500*180+2500*50+3000*30)*30 =9150000 /Month
Car Segment
Number of cars required for Delhi sector = 6000/30 = 200 cars
Number of cars required for Medical Tourist= 900/30~30
No. of Luxury Cars required for NRI + Foreigner = 1000/3~ 30
Luxury Cars/SUVs(Targeting Foreign tourists)
Type of CarsTotal number of cars
Target Cities
Jaipur • Tourist Attraction : Pink City. Other tourist points in close vicinity • Shopping Destination • Upcoming IT Hub • Range of luxury hotels and resorts
Agra• Taj Mahal alone gets minimum of 15,000 tourists daily• 848K – Foreign Tourists who stay overnight, 209 – Domestic, 1130K – One day visitors• Agra is a biggest centre of the footwear industry. • The hub of Leather industry• Emerging destination for IT based industry
Amritsar• Golden Temple & Waga Border • Local government working towards encouraging tourism through food festivals et al• Strong NRI community• Strong export based industry & upcoming luxury hotels
1
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Strategy to attract investors Cost Analysis
Initial Cost
Car Purchase Cost (50*700000)3500000
0Web Site Cost 200000
GPS one time cost (50*10000) 500000Other Cost 1000000
Total Cost3670000
0
OperatingCost- Per MonthCar Maintaince Contract Cost (50*5000/12) 20833.33
Car Serviceing Cost (50*10000) 500000Parking Cost 200000
Call Centre Outsourcing Cost 300000Office Setup Cost (in delhi) 300000
Office Setup Cost (in other three locatons) 300000Driver Expence (30 drivers, 6000 per month salary) 180000
GPS Cost (2000*250) 500000Marketing cost ( of all three media) 1000000
Total Cost 3300833
Total profit before tax (Revenue- Total Cost) 5849167Profit after tax 4094417
Break Even 8.963426 Months
Key Highlights • Break Even Cost
achieved in 9 months
• High profit bearing business
• Impressive future expansion plan
Marketing Strategies – STP Analysis
Positioning & Targeting
• The plan is to target two segments namely – Luxury segments & Young travel enthusiasts
• Some key points of its promotional campaigns are:
Type-I
NRI & Foreign National Tourists & Medical Tourists
As a safe alternative to travel
Convenience & flexibility of location
Opportunity to enjoy driving
Convenience to leave car
Positioning
Target Segment
Tier Type-II
Younger, College – going & travel enthusiasts
Flexibility to plan own trips
Better social status –for luxury segment
No overhead issues Sense of adventure Convenience
Type-III
Corporate Executives
Opportunity to plan sojourns between business trips
Ability to get better value of money- corporate discounts
The flexibility & convenience for tailor made trips & ability to leave cars anyplace will be highlighted throughout campaigns.
Marketing Strategies Communication Media
Promotions at IGI Airport Delhi • The booking stall will offer personalized services to the travelers by interacting
directly with them and understanding their individual needs.• IGI Airport has 23 million passengers footfall annually1
• Position strategically to attract foreign tourists at the airport by offering them free guidance to plan their trip in Delhi.
Internet Marketing Reach avid travelers through the medium on social media
o Facebook Page for the company & dedicated twitter handleso Spread awareness about the page and start trends on twitter by organizing competitions and posting
on famous travel pages such as lonely planet .
• Start a YouTube channel • To showcase travel experiences the customers had.
• Update various holiday destinations in and around Delhi
• Invest on personalized advertisement through Google and Yahoo.• Target bloggers & travel consultants such as MyGola to create awareness about the concept1: Source IGI Website
Marketing Strategies Communication Media
Collaboration • Tie-Ups with leading luxury hotels & resorts in Delhi, Jaipur & Amritsar.• Association with travel agencies such as MakeMyTrip, Expedia and local
agents to offer deals on the car rent.• Affiliate with leading hospitals such as Apollo and Fortis to offer specialised
services to the medical tourists.
ConclusionIt’s quite clear that by implementing this idea, we are not only reaching the breakeven within one year but also future expansion plan will make us more profitable.
Thank You