Question

Zipcar traditionally focused on marketing toward individuals without cars as a convenient form of alternative transportation. Zipcar has now begun to also focus its marketing toward businesses and organizations to use Zipcar for their employees. This is an example of:

A. Market expansion strategy
B. Market penetration strategy
C. Product development strategy
D. Diversification strategy

Answer 1

Zipcar's strategic shift to focus on businesses and organizations for employee use is an example of a Market Expansion Strategy, as it aims to reach new customer segments outside its original target market.

Step-by-step explanation:

When Zipcar traditionally focused on individuals without cars as a convenient alternative mode of transportation, it was operating within its original target market. Now, as it has begun marketing toward businesses and organizations for their employees' use, this strategic move is an example of a Market Expansion Strategy (A). Unlike Market Penetration, which aims to increase sales of existing products in existing markets, Market Expansion involves reaching out to new customer segments or markets.

Comparing this scenario to historical business strategies provides additional insight. For instance, the two intercity bus companies, Greyhound Lines, Inc. and Trailways Transportation System, preferred a broader market definition during their merger talks, to avoid being seen as a monopoly within the narrow 'intercity bus service' market. They wanted to be considered part of the larger 'intercity transportation' market where they held a smaller share.