DELIVERING CUSTOMER VALUE
MARKETING STARTER: CHAPTER 12
Enterprise: Leaving Car Rental Competitors in the Rear View Mirror
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 driver’s 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 hasn’t 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.
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 Enterprise’s 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.
: 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.