Enterprise has always focused on being the best in meeting customers’ needs. That focus has been the key to their success. Enterprise Rent-A-Car started out by leasing cars to individuals. Enterprise started to recognize that their leasing customers needed replacement cars while their leased cars were in the shop. Most of Enterprise Rent-A-Car’s growth has come from this focus on the local market.
2.) What are the bases for segmenting the rental car market?
Segmentation is splitting market place according to criteria. Market segmentations is the process by which customers in markets with some heterogeneity can be grouped into smaller, more similar or homogeneous segments
Market segmentation is the process by which customers in the market with some heterogeneity can be grouped into smaller, more similar homogeneous segments. Segmentation helps the companies pursue for types of product and market opportunities.
Market penetration involves increasing their presence in the market and thus increasing Enterprise turnover and profits.
Product Development involves improving service and offering new kinds of service. Example when enterprise started it has just the business of renting cars, now it offers service or not only cars, but vans and mini buses also.
Market Development involves improving enterprise business in new areas and target, new group of customers.
Diversification involves moving into new market with new products. Once Enterprise became success in rent a car business they started into selling of second hand cars.
Some stages involved in marketing orientation are mass marketing strategy, product variety marketing and target marketing. (Figure 3)
the Market Segmentation approach: This is the way of dividing the customers into different groups. Example, customer from referral sources, customer who goes on holidays, customer who usually gives pick up calls
Targeting: once segments have been identified, a decision about which and how many customer groups to target should be made.
Positing the product: companies must decide precisely how and where within the targeted segments to aim a product or products, brand or brands
Mass marketing is when a company has a product and just tries to sell the products without improving it. Hendry fords black car marketing is an example, where he tried to sell black color cheap cars without improving the product and ultimately other companies took fords car market share.
The three stages to carry out market segmentation are segmentation targeting and positing.
Segmentation variables are the dimension or the characteristics of induvial group or organization that are used to divide a total market in segments. Enterprise identifies the need of the customers and gives them some special service which its competitors don’t give. Enterprise deals with customers and its characteristic. Some customer characteristic include age, sex, family, race etc another here is socio-Economics which include income, occupation, education etc, geographical location like country, region etc
Purchase behavior: customer who had a good service from enterprise will stick on with enterprises, or whether he should rent a car again or not from enterprise . The benefit the customers get here includes, safe and happy journey
Consumer behavior and user status includes meeting the customer exceptions. Attitude towards the product include, the feedback on his first travel. Even though price of the product sometimes gives a edge value for products in the market, when it come to service sector the cheaper price and better service wins . Example you find a product for 2 pound and the same for 5 pound. Even though the 2 pound gives the same quality as the 5pound product, you spend more money on the 5 pound product thinking that is good.
Targeting depends mainly on deciding on an appropriate strategy. The marketing Mix mainly consists of 4 ps they are which worked together in the 1960,s which included product, the promotion, the price and the place: i.e. they should have the right product at a right price, promoted at the right place
In service sectors the products are usually the service he get. He pays money not for a product ,but for the service .Example in hospital we get treatment which is a service. Here the product is the service the customer gets and the service is renting cars. Service Characteristics are also perishable and don’t have ownership. I.e. In rent a car service, once used you cant get the service later for the give charge and we have ownership only when we travel which is just a limited period of time. The price factor is the amount the consumer spends for the product. Here the price is the amount charged for the service and enterprise has to make sure the customer doesn’t get heavily charged for its service. Infact enterprise pricing strategy is always less by 20 – 30 % less than its competitors
Right place: Right place is where the customer can get the service. It can be where customers meet more or near by a traffic signal where customers get a view of the business or somewhere in a shopping complex where customer can park their car. Instead on focusing more on air rental enterprise has focused in locality area, so that It can be close to its customers enterprises also line up their cars near theatres, hospital and other place where there is a chance, where people need vehicle
Promotion is really serving the customers for the business they give, enterprises employee visit insurance agents and referral sources with don nuts or pizzas, thanking them for the service they have given. They also have promotions which attract people to them like the one after September 11 2001; they charged only one side for a two side trip.
Positioning is basically positioning the business products in the minds of dealers and customers in target segment. It also means designing an appropriate marketing mix which conveys this desired positing. Positing is basically the final stage and the outcome
3.) What marketing recommendations would you make to enterprise to improve its marketing strategy?
College graduates once they finish their graduation want challenging jobs as they are ready to put in practical what they have learned. Not much company gives that much exposure. However enterprises rent a car hires more college graduates than any company in the nation assigning most of them to be field office entrepreneurs. (Source: fast company, June 1999). The company grasps the particular physiology make up of the first time employees who enter the work force with high expectation and extreme needs.
They expose their charges to jobs across the organization and they allow recruits to see how stars in a company function. The manager devotes their time and money to making young workers smarter, faster, and most important these employers have done away with the decrepit culture of dues paying. They make sure that young workers have meaningful, interesting task to do from day one. The distinctions is especially important in the rental car industry where the moniker “entry level worker “conjures up the image of a polyester uniform wretch behind an airport counter. That’s why enterprises calls its college hires management trainees. its is a management training program and so by calling its young hires management trainees, the company signals its aspiration for them . The employees spend a lot of time trying to study it customers
Each of the Enterprise more than 3,700 offices operates as a small business, giving employees the autonomy and authority to meet the local needs of customers. Branch managers have control of marketing initiatives, staff, and customer service and accounts receivables. Also, branch managers work directly with their own profit and loss statement to determine their success and failure opportunities. Enterprise also strives to offer customers great service by developing and training its employees for future opportunities. Ninety nine percent of its managers started as management trainees at branch level, so they understand the customer-oriented culture. As important they understand their local markets and the needs of customers in those markets. Thus enterprise is really a collection of small, independent business with the corporation providing capital and logical support. The Employees should also remember the 7P’s of Service marketing .They are
- price , Place, Product and promotion Plus
- People
- Physical Evidence
- Process
The Company still runs on its founder’s Jack Taylor’s philosophy “Take care of customers and employees , and profits will follow”
To retain it present market performance and to penetrate into other markets the company needs to attract and retain its employees. The company needs to attract people of the benefits the company offers to its employees. Even though dean pitman did the right decision by taking a job at enterprise he was not sure how career is would be when he joined the company. So enterprise should change the situation. Its need to let young graduates know the advantages if they work for enterprises and how their career and life will grow.
Enterprise need to keep in mind to give these information to graduates about the advantages of working with Them
- What they will learn and earn
- Commission on performance
- Personal life and appreciation of their hard work
- What is a management trainee work ?
- The training programs which they will receive
- Whether they will be relocated
- How long will it take them to get promoted
4. What marketing recommendation would you make to enterprises to improve its marketing strategy?
Marketing is the process by which you can temp your customer to buy your product or service. Tradiantly marketing depended on 4 P’s. Product, price, promotion, place
The need for modification of the 4Ps mix. The 7p’s :
Industrial marketers have long claimed that industrial marketing has features that make it unique and different to consumer marketing. The most important of these features are product complexity and buying process complexity that leads to a high degree of interdependence
Between buyers and sellers. This has led Webster (1984) to assert that the essence of industrial marketing is the buyer-seller relationship which binds the two together in pursuit of their corporate goals, each becoming dependent on the other. The focus of industrial marketing
should not be products but buyer-seller relationships. The P’s now are Product, price, promotion place, participants, physical evidence and process. These 7P’s are important for service marketing.
The strategy for growing depends on two main aspects
- Getting in customer so that Enterprise can grow every year in terms of revenue and profit
- Enterprise has to encourage people to use their service again
A strategic market plan is an outline of the methods and resources required to achieve an organizational role within a specific target market. It takes into action not only marketing, but also functional aspect of business unit that must be coordinated. (Source: marketing management) The strategy of an organization works well only if the organization has mission and goals. . IBM for example has insisted that its mission is helping business people make decision, when a company decides on its mission it really answers two questions. What is our business and what should our business be? Enterprise has answers to these questions and it makes sure that its employees understand it also
An organization mission and goals have to take into consideration of many external forces effecting business while deciding on the components of strategic market planning. ( figure 4 shows components of strategic planning) .A mission statement give a company a clear purpose of the business so that the organization doesn’t drift away, also it describes the unique aim of the origination ( where companies like enterprise ), it also keep the organization focused on the customers need .. Also mission statement provides guide lines to top manager and employees on what the organization is expecting from them and what they have to deliver their customer. Enterprise believes people first profits later because it believes that if you take care of your customers profits will follow
Tools for improving marketing strategy.
A number of tools have been proposed for marketing manager Enterprise should consider Boston consulting product portfolio analysis. Product portfolio analysis is a strategic planning tool that takes a product’s market growth rate and its relative market share into consideration in determining a market strategy. The Boston groups approach is based on the philosophy that a product market growth and its relative market share are important considerations in determining its market strategy The Boston groups approach can be divided into four parts.
Stars: Products with a dominant market share of the market and growth prospectus for growth.
Cash cows: Products with a dominant share of market but low prospectus for growth
Dogs: products that have a subordinate share of the market and low prospectus for growth.
Problem child: products that gave a small share of the growing market share, generally required a large amount of cash to build share
Enterprise can be called stars in the US. But it overseas operation can be called as a problem child, because it needs to invest a lot of money to get the market share as it was late in entering the markets and since the markets have well established players
Organization opportunities and Resources
Differential Advantage: If a marketing mix is developed that matches target market needs and expectations and is superior to those offered by competitors, there is a real or perceived differential advantage. One of enterprise advantage was instead on focusing on airports like many of it competitors, it chose to be located in places surrounded by a lot of people which gave them a differential advantage
Marketing opportunities: A marketing opportunity arises when the right combination of circumstances occur at the right place to allow an organization to take action towards reaching a target market. Cars have become more important part in people’s lives. They just can do anything without their car. Enterprise has and can again take advantage of this situation. For example if there is none to take the parents to hospital or church, enterprise does this service for them
Environmental Scanning : Environmental scanning was defined as the process of collecting information about the marketing environment to help marketers identity opportunity and assist in planning . Enterprises should focus more on environmental scanning to detect change in the market as it is extremely important to avoid crisis management. Enterprise has to get in partnership with insurance companies or airlines companies to create more market. Enterprise currently has a joint venture with a airline company.
Capabilities: A firms capabilities relate to distinctive competencies that it has enjoyed doing well and effectively. Enterprises can show a lot of capabilities in its crown , like experience of serving people for number of decades , it employees strength, it fleet of cars and the excellent service it has given over the years can been shown has it capabilities. To lure more people into their service it has show these .
Advertising: No marketing is full without advertising. Even though enterprise became a big company by 1987 only 20% of the people identified it as a rental car company. IT was in 1987 that enterprise started its national advertising campagain. Enterprise advertising campaign should focus in such a way that it mentions it is a rental car company, which it has pick up service and it has offices near by. Advertising should be focused globally as these can be useful for overseas market and reduce cost as the service the company offers everywhere is the same. Also the company has to improve its service very well to customers as word of mouth campaign is always an advantage for the company
Focus on other services: Enterprises started with a strategy as a rental car near by and it focused on setting up offices nearby place and ignored places like airports and other place. Now since it has to establish ground on rental service it has to focus more on Airport rental service and other travel service. It has to get into tie up with some major airlines to provide its customer with a discounted care service from enterprises. It also has to have tie up with companies, universities, hospitals, hotels, travel agents, holiday operators for their service for a much negotiated price better than what their competitor can offer
Improving airport Operations: since Enterprises has a strong cash flow, a better way of improving its airport operation is buying a rental company which has good presence in the airports. This not only improves the market share, but also gives enterprise more accesses to many airports where it doesn’t have operations and it also give enterprises the expertise’s the company’s had in its airport market
Making customers comfortable: Enterprises should make sure that customers are comfortable while traveling. It should have excellent seating. It should also offer its customers latest periodicals and magazine. They should also provide customer with mineral water and wet tissues and toys for the kids. Ultimately the driver should behave in a good manner and be polite to the customers and talk with them giving them the feeling that they are talking with their friend.
Investing more on technology: Enterprises should shut down many of its branch offices to avoid unnecessary expenses and should focus more on improving technology. No company today can’t survive without using latest technology. Car should be equipped with Global positing satellites systems, so that it can provide accurate and easy routes, avoid traffic lines, and the control station will have idea of where the vehicles is . It should use these data to check productivity of the service like the time taken, routes used, customers reaction to each service and based on those data’s, it should try to improve it
Loyalty Programs: Enterprises should also introduce customer schemes. They should have a mileage program and points should be redeemed with gifts or vouchers. The employee should be given some points if they introduce customers. They should introduce their loyalty cards and should have tie-ups with stores and shops to give discounts on their card. I also think they should start some kind of merchandising, where the customer can see the product through a catalogue while traveling, order it and the product should be send to the customers house.
Making use of current good will: Enterprise’s currently has a Lead position and a good will among most of its customers. It has therefore to use this good will as a artillery when ever its going with its new marketing schemes
5.) Will Enterprise marketing strategy work in international market?
Despite the fact that global marketing strives for a single over arching global strategy it is a mistake to assume that local Differences can be ignored. During the 1980s marketers thought to globalize the marking mix as much as possible by employing standard products, promotion, campagain price and distribution channels of all markets. The political economic and competitive pay off for such an approach was certainly great. Most recent marketers have realized that while it may be feasible to standardize a company’s offering in different markets a degree of adaptation to local difference is also required
Nike for example provides standardized product all over the world. However not all products are sold every where. Cnn for example uses the same version of news as CNN founder Ted turner say that Cnn is for Americans traveling around the world. However of late CNN has started country centric programs .McDonalds supplies the same products all over the world. However in countries like India, it doesn’t provide a beef burger or use beef oil for it French fries keeping the sentiment of the Hindu people in India. However that’s good for McDonald’s, because if they starting serving beef burger not keeping the mind the peoples sentiments they get a bad reputation and people might not go their restaurants. MTV even though started as a American music channel, it uses regional programming in all the countries it operate
Enterprises strategy is to have office nearby where people live, get promotion or business from referral sources. However enterprises cannot use that strategy in the international markets for the same success. Not only Enterprise, but every company should change its strategy while focusing on international market as people culture and life styles varies. Marks & Spencer tried to go into the Asian market with its British strategy and it failed. One best way to enter into a foreign market is to buy a established company or have a joint venture with another company in that country until it’s ready to get up and walk. For example when Wal-Mart wanted to enter the United Kingdom it didn’t enter directly, it invested in asda and made its presence here.
Before Entering on an international market Companies should do a preliminary screening, analyze the market potential and the sales potential. Some factor which should be taken into consideration while entering a foreign market is the political environment, economic environment, social and culture environment , the market access, the potential of the product or service in the particular market , the cost for setting up business and the profits it can make
Enterprises is using different approaches in international market depending on the culture and the external factors. However the bottom line of its business approach is same is same. Enterprises is doing a good job in Canada a market which is as most the same as US, the U.K.,Germany and Ireland. When Employees in these countries recognize that customers need their services at another location, and when they feel that they understand the business well enough, they open another branch. Presently enterprise aim is stay within these market and not beyond those markets. Once they have established there presence well here they might move the market.
The growth of enterprise depends mainly on its operation in its international market, because it has a good presence in the US. So to increase its profit, enterprise has tow work hard to make the people buy the strategy. The Fact we have to remember here is that enterprise product is service and its characteristics are intangible. However the variability of the service may vary. This depends mainly on the drivers and the cars that they use. If the drivers behavior is good and the car is a good car, quality of service is good, however if the driver is good and if the car is bad, the quality of service is bad
To work out its strategy in foreign markets it should have a good advertising campaign in daily paper and magazine to get the people hear of the company, the company should then start a promotional scheme like one side free trip to let it old strategy of word to mouth to spread and creating a good reputation about people . It should offer better service, keeping in view of the cultural and social difference and it should always maintain low price than its competitors. A good way to start is get customer feedback on rental car service and device a strategy on that. Finally using it productivity to the maximum it can improve like easy jets which uses it aircraft to run the maximum number of routes per day. Its Trade name, success in US and it good reputation is sure to give a edge in International markets. One of the biggest challenges facing the car rental industry today is improving its image. Specifically, it’s important for all rental car companies to work together to make sure all customers have a positive experience.
The last thing Enterprise need to do in the foreign market is to scare customers away from the rental car business because of negatives, like unfair tax burdens, challenges that inhibit a speedy and convenient transaction, and other regulations that raise costs.
Conclusion:
It is not difficult to grow, because when our competitors make mistakes we grow automatically, to stay there on top is always difficult. So it is important for companies not to make big mistakes and learn from their mistakes to improve. Enterprise is presently doing a good job which is evident from the way its was ranked highest in customer satisfaction for rental cars companies for two consecutive year by J.D. Power and Associates ( source : J.D. Power and Associates ). It just has to make sure that its cars are running on perfectly without a breakdown,