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Common Information

Indian car rental market may be segmented under four broad categories. First, the most popular segment is of a fuel conscious and mileage hungry consumer who prefers a chauffeur driven car. To extract maximum benefit from hired car, consumer representing

(5) mileage per liter of fuel that he has paid for. Consumer of this segment is very price sensitive and wants maximum value for money even if he may rent by unorganized players. Branded players are lagging behind to true this segment because

(10) Indian marker, organized car rental industry is crawling for the last couple of years to position itself as a most sought after option to meet segment requirements. Hertz India is also practicing the same. To position itself perfectly in the mind of the targeted segment, it has gone for multiple strategic routes to win over different segments. The major external influencing factors for the consumer in this segment may

(15) be the firm’s marketing efforts to establish itself as a service provider with value for money. Due to their association with renewed airlines and hotels, Hertz, to a lot many people means faith. This may help her to create an impression in the mind of this segment that they will definitively be cheated and get their value, even if it means spending a little extra. Further, it is trying to educate this segment about

(20) benefits of self-driven car as a medium of hassle-free journey by projecting a premium value for money image and with a fleet nix of compact and luxury cars (such as Ikon, Accent and Esteem).Second, a sizable amount of people are there who usually use their own compact or three box mid-size car but prefer to enjoy the riding thrill of SUV (sports? Utility Vehicles)

(25) like Ford Endeavor/Honda CRV/GM Chevrolet or a Luxury car like a Mercedes/Camry for a shorter time span. Upcoming new generations urban executive of large corporate in India with a high disposable income and proactive to enjoy all new things in life and to make it more adventurous and eventful represent this segment. To them renting a self-drive car and driving off to a palace of their choice in a

(30) Mercedes /SUV gives them an experience off to a place of their choice in a holiday. Under this same self-drive segment, another type of consumers are frequent international travellers (including foreign tourists) who prefer their privacy and independence and wish to choose their own routes/ car model at the time of exploring destination. They love their freedom & space in life wherever they

(35) travel without any barrier like being driven by a chauffeur. Equipped with their internationally accepted credit cards, an international driving permit or license, they prefer advance car rental booking by logging on the car rental company’s website and thereafter just picking up the keys of their booked car once they enter a new country/city. They are adventurous, driving enthusiast, belonging to the upper middle

(40) class, have brand loyalty about their car rental agency. In this self-driven segment, Hertz India is trying to position itself as a contemporary service provider by offering both economy cars and SUV’s (Scorpio and Tata Safari). To win over occasional self-drivers of SUV type cars and frequent travellers. Hertz uses slogans like "Break free" or "Drive the World’s #1" regularly in travel magazines to portrait the quality of its cars,

(45) and the range it offers. Third segment consists of instructional consumers, mainly hotels in big cities and air service providers. Institutional consumers prefer quality and service assurance to offer maximum possible service to their customers. In India, all big car rental agencies have contract with start hotels to offer rental service to them. In this segment, Hertz has

(50) prominent clienteles like Taj Group of Hotels, Marriott and Jet Airways. Further, they have contract with hotels like Shangrila in Delhi, and Renaissance and JW Marriott in Mumbai to provide all car rental requirements of them. Their other clients are Carlson Wagonlit, BTI Sita, Thomas Cook and online travel sites like Make my trip, India times and Travelguru. According to their deal with Jet Airways, it allows Jet

(55) Privilege members to earn ‘miles’ every time they use Hertz car rental service. For every Rs. 1000/- spent on Hertz rentals, a Jet privilege member earns 100 JP Miles and special discounts are given to platinum, gold and silver card holders.

In recent past ‘fleet management’ is coming up as a possible fourth target segment for car rental companies in India. Word wide cars are not purchased but only leased and

(60) this trend is getting its root in Indian market also. It means the management of a fleet of vehicles, using certain tools, to improve operational efficiency and effectiveness. To win over consumers of this segment, services should be professional and a fleet management company should address all the issues a company might deal awith pertaining to managing its fleet. In India, Lease plan Fleet Management

(65) India (LPFM), the wholly-owned subsidiary of Leas plan Corporation, Netherlands is pioneer in this focusing more on car rentals than on fleet management. Though it provides chauffeur-driven cars to many companies like IBM, Sony, KPMG, Compaq, there is a huge scope in this segment for future growth. This segment demands

(70) Customized service in terms of vehicle acquisition, fuel management, vehicle financing and maintenance, resale of the cars at the end of the contract period etc.


Common Information Question: 5/6

As a business manager you think ‘fleet management’ a profitable segment for organized sector to explore in India because:


Companies want to associate with ‘brand name’ and unorganized players are lacking here


There is a huge scope as competition is low in this filed


Everywhere in India logistics services are outsourced and companies are focusing on their core business


This business demands gamut of customized services and organized professionals may only offer those

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Option(B) is correct

Clearly mentioned in line 69.

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