Zipcar is a car sharing program based on Cambridge Massachusetts. It imposes an annual fee for its members depending upon the level of service and a fee per hour. These fees cover insurance and initial driving license checking fee. Consumers do not have to worry about insurance, down payment for car and monthly fee. Zipcar targets cities where it is difficult to find parking and people depend upon local transportation system. One of the main attractions of Zip car is customers can own car when they need without having to deal with monthly payment, insurance and parking problems.
A brief overview of the key facts and issues related to management consumer behavior: Zipcar’s primary market is among urban dwelling people. People living in cities such as Boston primarily depend upon public transportation. Running errands and even work can be either within walking distance or within a reach of public transportation. Parking can be expensive and many time unavailable. Since these people use car occasionally, sharing car instead of owning one can be less expensive. Zipcar also focus its services to students who need car occasionally but do not want to own one. After paying certain fee, its members can have car with whenever they want for a small fee. Zipcar has locations around cities where it has fleet of cars. Its members can choose different kinds of cars. Members can pick up cars and return car on the designated spot using Zipcard. The same car will be used by other members too.
One of the issues Zipcar has is late return of its cars. Zipcar rents car on hourly to weekly basis and depends upon members frequently using cars as its revenue is generated when people drive Zipcar. Zipcar’s ratio of car and customer is not 1:1, it depends upon members sharing car. Its members reserve car for specific time. Traffic and other unforeseen situations cause late return. The same car may be reserved by another member who will now have to wait for the car. If Zipcar charges late fee it will annoy its member. This is a double edge sword situation for Zipcar.
The critical success factors for Zipcar: Zipcar is successful because it targets a specific group of people and meets their requirement. The city dwellers who only need cars occasionally can own car on the need basic for a low fee. Zipcar knows what its customers need; car when they want and where they want without having to pay for the car, insurance and parking. With as low as $7.50 its members can own car (Zipcar, 2012). The group of consumers Zipcar targets is looking not to spend money for something they do not need or use frequently and Zipcar perfectly serves their need. Zipcar not only was able to serve consumers’ need, but also changed with their need. Zipcar also provided luxury cars such as BMW for those consumers who want luxury cars, hybrid cars for environmentally conscious customers and even vans. Zipcar implies marketing policy where it makes loyal consumers and these loyal consumers spread its goodwill to other people. Zipcar is able to partner with organizations such as universities to offer its service to consumers. Zipcar’s success is also credited to its strategy of using social media such as Twitter, Facebook and apps on smartphone. The consumers that Zipcar targets want to utilize these kinds of social networks. Zipcar’s primary consumers are university students or middle aged city dwellers. These people want to be able to use smartphone to reserve car. They want 24/7 service. They want to be able to change types of cars. They want Toyota to visit family but BMW for a date. They do not want extra expense of insurance, car payment and parking. All these consumers need come into a packet in a form of Zipcar. So Zipcar is successful.
Mechanisms Zipcar has in place to manage consumer behavior and their intension: Zipcar has a mechanism of imposing fines to control consumers’ behavior. Zipcar charges up to $50 per hour for every late hour. They can charge up to $150 per late return. Zipcar imposes cancellation fee, penalty for shortening rental hours, damage fee and general fee for violating its rule (Zipcar, 2012). It wants to provide service to as many consumers as it can. This control mechanism is in place to control consumers’ behavior. If the late fee is not enforced, consumers may return car late and Zipcar will not be able to provide its services to other consumers. Zipcar does not want consumers to make reservation and cancel it as it will lose money. Also Zipcar wants consumers to have a sense of its car as their own car and take care of it. Zipcar is imposing these control mechanism so that as many consumers as possible can use same car and generate as much revenue as they can from a single car. Zipcar also does not want its consumers to get dissatisfied with its service due to late return.
Advice to Sal and Anita: Sal is in a very important meeting. It will be realistic and beneficial for Sal to pay late fee than ruin his interview. If he is late by two hours he may have to pay $100 fine which is a lot of money but is not whole lot when your job is in stake. But he can choose to excuse him from the interview and call Zipcar and explain his circumstance and extend his rental time. For future, it will be wise for Sal to book an extra hour for this kind of situation. Anita can call Zipcar and request another car. She may request Zipcar to get another car from other location if there is no other car at the location she is in. She can also take a taxi and ask for a reimbursement from Zipcar.
3 new procedures recommendation to manage consumer behavior related to lateness: The situation of the late returns of cars is damaging for Zipcar’s reputation. This situation will dissatisfy both customers; the customer who returns the car late and the customer who does not get a car. The first customer will get angry as he has to pay fine. The customer who does not get his/her reserved car will be dissatisfied. Zipcar should try to make both parties happy so that the customers remain loyal to the company. Imposing a late fine can make consumer deter from Zipcar. Imposing positive enforcement such as rewarding customer for being on time may be beneficial for Zipcar. This will encourage consumers to return car on time. Rewarding its members for returning cars on time by giving them extra hour of car or upgrading cars to a luxury car for next reservation will encourage members to return car on time. Another strategy Zipcar can imply for the late return of the car is by providing members with a replacement car. Members may see it as a positive observation when they get replacement car instead of their reservation when it is late. If the car is upgraded to luxury car it may be more remarkable service for the member. If there is no replacement car Zipcar can pay for taxi service and give credit on future reservation. Zipcar can add some more cars to its fleet so that there is no shortage of cars for its members. Zipcar can also leave some gap time between two reservations to prevent overlap of service due to late return. I think positive enforcement along with sense of awareness of consequence of late return to another member will have greater impact. Reward with free hour or free upgrade will attract its members. They will also feel a sense of community with awareness and will inclined to return on time.

Reference:
Zipcar. (2012, February 05). Fee policy. Retrieved from http://www.zipcar.com/brynmawr/apply/fees