Read the Zipcar Case and in your team, answer the following questions posted below (do not answer the questions written in the cases, rather answer the questions posted below)

1. Is purchasing the use of Zipcar a high or low involvement purchase? Why?

ZIPCAR: IT'S NOT ABOUT CARS-IT'S ABOUT URBAN LIFE Imagine a world in which no one owns a car. Cars would still exist, but rather than owning cars, people would just share them. Sounds crazy, right? But Scott Griffith, CEO of Zipcar, the world's largest car-share company, paints a picture of just such an imaginary world. And he has nearly 800 000 passionate customers or Zipsters, as they're called who will back him up. Zipcar specializes in renting out cars by the hour or day. Although this may sound like a minor variation on the established rental car agency business, it's actually an entirely different concept. with promotional pitches such as "We Earth" and "Imag- ine a world with a million fewer cars on the road." Zipcar vibrant green logo reflects this save-the-Earth philosophy, And Zipcar really does deliver on its environmental prom- ises. Studies show that every shared Zipcar takes up to 20 cars off the road and cuts carbon emissions by up to 50 percent per user. On average, Zipsters travel 44 percent fewer miles than when they owned a car, leaving an average of 219 gallons of crude oil in the ground. Multiply all this out by 11 000 cars in Zipcar's fleet, and that's a pretty sub- stantial impact on the environment. But it wasn't long before Griffith realized that if Zip- car was going to grow, it needed to move beyond just being green. So the brand has broadened its positioning to include other urban lifestyle benefits, based on the most common needs consumers have: I don't want the hassle of owning a car, I want to save money; I take public transit, but need a car sometimes; Once in a while I need a sec- ond car; I need a big car for a big job; and I want to impress my boss. Another important benefit Zipcar offers its target market is convenience. Owning a car in a densely popu- lated urban area can be a real hassle. Zipcar lets custom ers focus on driving, not on the complexities of car ownership, A CAR RENTAL COMPANY THAT ISN'T ABOUT CARS As Griffith considered what Zipcar had to offer, it was apparent that it couldn't be all things to all people. The market for car rentals would have to be carefully seg- mented, and Zipcar would have to choose just the right segment to target. Griffith identified a segment of the market that was not being served by traditional car rental companies: Not travellers visiting another city, but people who sometimes need a car for a few hours, or a day, in the city they live in. People who live in big cities like New York, Boston, and San Francisco, who don't own a car of their own. And students who don't have cars, and occa- sionally need one In Canada, Zipcar has locations in Kitchener-Water- loo, London, Ottawa, Toronto, Vancouver, and Victoria all of which are university towns. The Zipcar concept is also particularly well suited to people who live or work in densely populated neighbourhoods in cities, where owning a car is difficult, costly, and environmen- tally irresponsible. Interestingly, Zipcar doesn't see itself as a car rental company. Instead, it's selling a lifestyle. "It's not about cars," says CEO Griffith, "it's about urban life. We're creating a lifestyle brand that happens to have a lot of cars." So Griffith segmented the market, identified a mar ket that was underserved, and decided to target it. The next step was to position Zipcar in the minds and hearts of consumers. Initially, the Zipcar brand was positioned exclusively round a value system. As an urban lifestyle brand, Zipcar focused on traits that city dwellers have in common. For starters, the lifestyle is rooted in environmental conscious ness. At first, Zipcar focused on green-minded customers FULFILLING CONSUMER NEEDS Zipcar operates on a membership plan. To join, you pay around $60 for an annual membership and receive your personal Zipcard, which unlocks any Zipcar vehicle located in urban areas around the world. Then, when you need a car, reserve one-minutes or months in advance online, by phone, or using a smartphone app. You can choose the car you want, when and where you want it, and drive it for as little as $7.50 an hour, including gas, insurance, and free miles. When you're ready, walk to the car, hold your Zipcard to the windshield to unlock the doors, and you're good to go. When you're done, you drop the car off at the same parking spot---Zipcar worries about the maintenance and cleaning. Zipcar not only eliminates the hassle of urban car ownership, it also saves money. By living with less, the average Zipster saves $600 a month on car payments, insurance, gas, maintenance, and other car ownership expenses. That's like getting a $10 000 a year raise after taxes. In an era when consumers have become more frugal, this is a big plus, especially for those looking to live more minimally Zipcar isn't for everyone it doesn't try to be. Instead, it zeros in on a narrowly defined urban lifestyle position- ing. For starters, Zipcar "pods" (a dozen or so vehicles located in a given neighbourhood) are stocked from a portfolio of over 50 different models that trendy urbanites love. The vehicles are both hip and fuel efficient: Toyota Priuses, Honda CRVs, MINIS, Volvo S60, BMW 328, Toyota Tacomas, Toyota Siennas, Subaru Outbacks, and others. And Zipcar now has plug-in hybrids, fully electric vehicles, and full-size vans for big jobs. Each car has its own personality name and profile created by a Zipster. For example, Prius Ping "jogs in the morning doesn't say much," whereas Civic Carlos "teaches yoga; loves to kayak." Such personal touches make it feel as if you're bor- rowing the car from a friend rather than being assigned whatever piece of metal happens to be available. To further eliminate hassles and make Zipcar as con venient as possible, company promotional tactics are designed to appeal to city dwellers. The company's goal is for Zipsters to not have to walk more than seven min utes to get to one of its car pods--no easy task. "Even with today's highly targeted Web and mobile technolo gies, it's hard to target at that hyper-local level." says Griffith. So our street teams do it block by block, zip code by zip code." Thus, in addition to local ads and transit advertising, Zipcar reps are beating the streets in true guerilla fashion With its eye sharply focused on maintaining the Zip- car image, the company is consistently developing new features that appeal to tech-savvy urbanites. Recently, the company has shifted its focus a bit from being a Web- based business to being an overwhelmingly mobile con- cern. Soon, Zipcars will have in-car device holders for smartphones that will allow for easy plug-in and hands- free navigation. The interface between the cars and the users will allow playlists stored on the phone to be played through the car's audio system. Users will be provided with information specific to the vehicle they are in a per- sonalized deal recommendation service, and a real-time feedback loop where users can report on vehicle cleanli- ness, damage, and fuel levels. new members join up at the recommendation of existing customers. "When I meet another Zipcar member at a party or something, I feel like we have something in com- mon," says one Brooklyn Zipster. "It's like we're both mak- ing intelligent choices about our lives." And just as Harley owners get together on weekends to ride, the Internet is littered with announcements for Zipster parties at bars, res- taurants, and comedy clubs, among other places. As Zipcar has taken off, it has broadened the appeal of its brand to include a different type of urban dweller- businesses and other organizations. Companies such as Google now encourage employees to be environmentally conscious by commuting via a company shuttle and then using Zipcars for both business and personal use during the day. Other companies are using Zipcar as an alterna- tive to black sedans, long taxi rides, and congested parking lots. Government agencies are getting into the game as well. The city of Chicago recently partnered with Zipcar to provide a more efficient and sustainable transportation alternative for city agencies And Washington, D.C., now saves more than $1 million a year using Zipcar. Fleet man- ager Ralph Burns says that he has departments lining up. "Agencies putting their budgets together for next year are calling me up and saying, 'Ralph, I've got 25 cars I want to get rid of How is Zipcar's strategy of positioning itself as an urban lifestyle brand working? By all accounts, the young car-sharing nicher has the pedal to the metal and its tires are smoking. In just the past five years, Zipcar's annual rev- enues have rocketed nearly five-fold, to more than $270 million. Zipcar has also reached the milestone of being profitable. And with 10 million people now within walk- ing distance of a Zipcar, there's plenty of room to grow. As more cars are added, Zipcar's reach will only increase. Zipcar's rapid growth has sounded alarms at the tradi- tional car-rental giants. Enterprise, Hertz, Thrifty, and even U-Haul now have their own car-sharing operations Avis also had one, but decided to shut down its own ser vice and buy Zipcar for nearly $500 million. The Zipcar brand will now benefit from cost savings that the large- scale rental service enjoys. As for the others, Zipcar has a big head start in terms of size and experience, cozy relationships in targeted neighbourhoods, and an urban hipster cred that corpo rate giants like Hertz will have trouble matching To Zipsters, Hertz rents cars, but Zipcar is a part of their hectic urban lives. Sources: Based on information from Mark Clothier, "Zipcar Soars After Profit Topped Analysts' Estimates," Bloomberg.com, Novem ber 9, 2012: Darrell Etherington, "Zipcar CEO Details In-Car Assistant, Personalized Deals and Member Onboarding for Mobile FOSTERING BRAND COMMUNITY Zipcar's orientation around the urban, environmentally conscious lifestyle fosters a tight-knit sense of customer community Zipsters are as fanatically loyal as the hardcore fans of Harley-Davidson or Apple, brands that have been nurturing customer relationships for decades. Loyal Zipsters serve as neighbourhood brand ambassadors: 30 percent of