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Customer-Product Profitabiliy Analysis

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This is a discussion of customer profitability analysis for a business.

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Car Rental Company rent vehicles to corporate and leisure travelers. The profit drivers are number of car rental days, revenue per rental day, and volume of transactions and utilization rate of fleet.

The service that pays the highest to the company is corporate rentals. The company has tie-up with a middle-sized company in the same location. So whenever top level executives visit the office from different locations they take high end car rental from the company. Within the same location, when managers have to travel for meeting customers or for some other work they take budget car rentals.

The profitable product is providing rentals to leisure travelers. In this segment, high profit customers are families who are on vacation and since there are more members, including children they would seek an upper end rental. The mixed bag customers are groups of friends who want to drive up to places on a long weekend. They share the cost and hence go for upper-middle level vehicles.

The losing customer group is that of local customers who stay in the same area as the company and once in a while ...

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