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Chapter 12 MARKETING CHANNELS: DELIVERING CUSTOMER VALUE MARKETING STARTER: CHAPTER 12 Enterprise: Leaving Car Rental Competitors in the Rear View Mirror Synopsis Since the late 1990s, Enterprise Rent-A-Car has been number one in the car rental business in terms of sales and profits. Enterprise passed previous industry leaders Hertz and Avis by offering competitive pricing and industry-leading customer service. But more than anything, it was a customer-driven distribution strategy that put Enterprise in the drivers seat. Enterprise found a large, untapped segment of customers outside of airports, the traditional focus for rental cars. Enterprise grew by opening outlets in residential neighborhoods and targeted people with cars in the shop, insurance companies providing temporary vehicles, or people who simply want a different car for a short trip or special occasion. With an unchallenged network of locations in place, Enterprise then came up with another game-changing distribution idea: picking customers up and bringing them back to the rental office. With the home-city market locked up, Enterprise then challenged Hertz and Avis on their own turf: airports. Enterprise Holdings (with its Enterprise, Alamo, and National brands) now captures 53 percent of the total rental car market and 31 percent of the airport market, ahead of jointly-owned Avis/Budget at 30 percent and Hertz at 26 percent. Enterprise hasnt forgotten that customer service is king. And with its new WeCar car-sharing program, it continues to seek new distribution opportunities, making cars available wherever, whenever, and however customers want them. Discussion Objective The chapter-opening Enterprise story shows how a company employing a unique distribution strategy disrupted an entire industry and became the dominant market leader. Enterprise Rent-A-Car took on an industry of well-entrenched competitors (Hertz, Avis, and others) by breaking ranks from the standard industry distribution model of renting cars only at airports. It recognized a gap in the market and targeted customers with unmet needs through a totally new distribution approach. Starting the Discussion To get the discussion going and to illustrate the core elements of Enterprises groundbreaking distribution strategy, show some Enterprise Rent-A-Car commercials. Each of the following ads illustrates different selling points, all focusing on the unique needs of non-airport customers. As the discussion progresses, help students to understand how Enterprise dramatically changed the distribution rules in the car rental industry. Use the questions below to focus the discussion. www.youtube.com/watch?v=d5ThsHyPl-Y : This ad highlights the core elements of the Enterprise strategy that established its competitive advantage: non-airport customers, special occasion car rental use, low prices, and free-pickup. ... View Full Document

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