The car hire market in the UK evolves around the tourism industry Essay Example

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The economic instability in the United States, United Kingdom, and Europe will have an impact on consumer spending and subsequently affect the tourism industry. Moreover, the potential war between the UK and Iraq poses a threat to the economy, resulting in a decline in tourist numbers and affecting the car rental sector. In the UK, driving regulations specify that individuals must be at least 17 years old but no older than 70 to drive. Changes in business and corporation tax as part of modifications to the tax system can significantly influence decisions regarding purchasing or renting vehicles in the long-term rental market. Additionally, alterations in income tax linked to company car benefits play a crucial role in the business car rental market.

(http://www. the-list.co.uk/acatalog/mp71008.html) Despite the threats in the macro-environment, the UK car rentals market is experiencing an increase in rentals of around 6 percent (http://news. bbc.co.uk/). This is due to the rise in fuel prices and under capacity. However, these changes may only be temporary in the UK due to recent rail problems and increased fares by Rail companies. The dominant players in the UK car rental market are major international companies such as National Car Rental (previously EuroDollar), Avis Europe, and Hertz. These companies operate through a combination of wholly-owned and franchised operations. The remaining market consists of numerous small companies that primarily serve local markets. Avis, the largest car rental company in England, is currently experiencing shortages of cars and high demand from corporate and public clients. This presents opportunities for new companies to enter the market.

Target Marketing is the process of identifying market segments, selecting one or more of them, and developing

a marketing strategy to meet their needs (Hill ; O'Sullivan, 1999). The company's segmentation strategy can range from the concentration strategy where the company targets on one segment to the multi-segment strategy where the company selects several segments in the market, satisfying each with a different marketing mix. A concentration strategy carries financial risk if the selected market experiences a downturn. On the other hand, selecting too many segments can result in thin marketing efforts and extra expenses. Therefore, in today's competitive car hire market, it is favorable to adopt a multi-segment strategy that spreads risk across a few segments.

The car hire industry has two main customer groups: business and leisure. Business customers generate 53% of revenue, while leisure customers account for the remaining balance (http://www.the-list.co.uk/acatalog/mp71008.html). Therefore, our target audience consists of corporate business clients and leisure clients. The marketing plan will be divided into two strategies to cater to the specific needs of each sector.