Questions 60 to 65.

SECTION - B (PART - II)

The questions in this group are based on the content of the passage. After reading the passage, choose the best answer to each question. Answer all questions following the passage on the basis of what is stated or implied in the passage.

Number of words in this passage : 942

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 chauffer driven car. To extract maximum benefit from hired car, consumer representing this segment wants to check credibility of car rental agency and chauffer in terms of mileage per liter of fuel that he had paid for. The consumer of this segment is very price sensitive and wants maximum value for money whether the rents an economy car like a Tata Indica or a top end luxury limousine. This segment is dominated by unorganized players. Branded players are lagging behind in luring this segment because of their stringent service condition in comparison to unorganized players. In Indian market, 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 be the firm’s marketing efforts to establish itself as a service provider with value for money. Due to their association with renowned airlines and hotels, Hertz, to a lot many people means faith. This may help Hertz to create an impression in the mind of this segment that they will definitely not be cheated and get their value, even if it means spending a little extra. Further, it is trying to educate this segment about benefits of self-driven car as a medium of hassle-free journey by projecting a premium value for money image and with a fleet mix 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) like Ford Endeavor/Honda CRV/GM Chevrolet or a Luxury car like a Mercedes/Camry for a shorter time span. Upcoming new generations or urban executives of lager 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 place of their choice in a Mercedes/SUV gives them an experience similar to that of a foreign holiday. Under this same self-drive segment, another type of consumers are frequent international travelers (including foreign tourists) who prefer their privacy and independence and wish to choose their own routes/car model at the time of exploring destinations. They love their freedom & space in life where-ever they travel without any barrier like being driven by a chauffer. Equipped with their internationally accepted credit cards, an international driving permit or license, they prefer advance car rental bookings 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 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 SUVs (Scorpio and Tata Safari). To win over occasional self-drivers of SUV type cars and frequent travelers, Hertz uses slogans like “Break free” or “Drive the World’s # 1” regularly in travel magazines to portray the quality of its cars, and the range it offers.

Third segment consists of institutional 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 star hotels to offer rental service to them. In this segment, Hertz has 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 Mariott in Mumbai to provide all car rental requirements of them. Their other clients ar Carlson Wagonlit, BTI Sita, Thomas Cook and online travel sites like Makemytrip, Indiatimes and Travelguru. According to their deal with Jet Airways, it allows Jet 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. Worldwide cars are not purchased but only leased and 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 with pertaining to managing its fleet. In India, Leas Plan Fleet Management India (LPFM), the wholly-owned subsidiary of Lease Plan Corporation, Netherlands is pioneer in this filed. Orix Auto and Business Solutions, is also present in this segment. Hertz is 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 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.

60. The primary purpose of this passage is to:

(A) Illustrate how Hertz could plan for the Indian market and maximize profits.

(B) Illustrate buying behavior of unorganized sectors offering car rental services.

(D) Illustrate consumer awareness and views about options available in car-rental business in India.

Explanatory Note:

Choices C and D are the ones relevant to the central idea of the passage. However, the answer is choice C. Choice D is ruled out as it talks of options available, whereas the ‘fleet management’ area is spoken of as a possible fourth target segment. Choice (C)

61. ‘Self-Drive’ concept may be a lucrative option to a manager to lure Indian consumers because:

(A) Collectivist culture motivates Indian consumers to opt for self drive.

(B) Indian roads encourage consumers to experience joy of long drive.

(D) A sizeable number of Indian consumers aspire to enjoy new things in life.

Explanatory Note:

Choices C and D are the ones relevant to the ideas at the beginning of para 2. However the answer is choice C. Choice D is ruled out as it uses the words ‘a sizeable number’ to talk of those who look for new things in life – whereas this desire is attributed to upcoming new generations of high income individuals. Choice C is appropriate, since we can infer that a ‘sizeable number’ cannot afford luxury cars but would enjoy the experience of riding in one.

Choice (C)

62. As a business manager of a car-rental company, you may popularize ‘self-drive’ concept to international travelers because:

(A) They know Indian roads and want to explore new place on their own.

(B) They dislike concept of chauffeur as Indian chauffeurs are not very professional.

(D) They can easily book their cars through website of car rental agencies.

Explanatory Note:

Choice C is the answer and is drawn from the underlined sentences which say that the international traveller looks for privacy, independence, freedom and space and prefers these to travelling in groups or with chauffeurs. Choice (C)

63. As a business manager of a globally recognized ‘car-rental’ agency if you want to tap institutional consumers in India, you should not:

(A) Bank on your globally recognized ‘brand name’ to ensure sale.

(B) Make a list of your global clientele to impress your prospective customer.

(D) Accept service assurance not as a major influencer behind buying decision.

Explanatory Note:

The answer is choice (D). It is clear from the first sentence of the third para that, for institutional consumers, service assurance is a requirement (and will, therefore, be a major influence). While the sentence is confusing what it means is that you should not consider service assurance as unimportant. Choice (D)

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

(A) Companies want to associate with ‘brand name’ and unorganized players are lacking here.

(B) There is a huge scope as competition is low in this field.

(D) This business demands a gamut of customized services and only organized professionals can offer those.

Explanatory Note:

The answer is choice (D). The last para makes it clear that, in the fleet management segment, all the issues that a customer may face need to be addressed. For this the service needs to be professional. Choice (D)

65. If you are to tap ‘first’ segment of ‘car rental’ business, as a manager of a branded company, you should not:

(A) Advertise your band name to communicate with consumers.

(B) Compare your service conditions vis-à-vis your competitors to influence consumers.

(D) Create unique value proposition to position you away from your competition.

Explanatory Note:

The answer is choice (A). It is clear from the first para that the first segment is dominated by unorganised players, and that the important aspects are economy and competitiveness. Choice (A)