Executive Summary (Madison)
The United States car rental industry began in 1916. Car rental fleets can be increased or decreased based on demand factors. The industry is broken down into two very distinct markets. One is airport rentals and the other is local rentals. About $12 billion makes up the airport industry revenues. Olympic-Rent-A-Car was founded in 1976 by John Uelses. In 2012 they had 8% of the market share. Upon launching there were 5 major car rental agencies. The Olympic Medalist Award customer loyalty program launched shortly after other competitors. Olympic provided overall lower pricing than other leading companies. The different tiers to the award program include Bronze, Silver, and Gold. Primarily the customers who choose Olympic are leisure travelers.
Problem Statement (Robyn & Phil) feel free to add or edit
Do they change the medalist program and if they do how do they do it?
How much should they be spending on advertising?
When do they implement the change?
How to form a distinctive competitive strategy?
With the growth of the car rental industry on the rise, national companies are becoming increasingly aggressive to both sustain a competitive edge, as well as retain their loyal customer base. Olympic is one of the smallest national players, with a market share of 8%, and is still recovering from revenue loss from 2008-2009. Olympic is sensitive to aggressive moves its competitors are making to gain market share. They must remain focused because their narrow operating margin, and their limitations with a smaller fleet of cars than their competitors. Olympic needs a marketing strategy that will allow it to retain brand loyal customers, and grow its market share in order to create a stable profit stream in order to do future expansion.
SWOT ANALYSIS (Phil) feel free to add or edit
Strong Brand Perception associated with ‘Winning” and “Quality Service”
Strong airport distribution through franchisee method
Lower prices compared to leading players in the industry
Market follower rather market leader
Sensitive to aggressive moves by leading competitors.Olympic has the smallest market share out of the 4 national companies. Olympic is still recovering from massive revenue loss during GFC
Loyalty Program is now being perceived not as ‘good value’ compared to competitors
Olympics’ customers were not brand loyal and belongs to several other car rental loyalty programs
Olympic has a window to form a distinctive competitive strategy that cannot be copied unlike the current Loyalty Programs by their competitors
Additional channels for promotion and pricing through increased internet bookings
Leverage on convenience that online bookings bring for a new unique pricing model that is not as reliant on variable pricing or add to the variable pricing model
Competitors edging them out
Increased buyer power through the ease of travel booking online ease of access to information through internet price comparison tools allows consumers to shop for best price rather than stay brand loyal
Evaluation of Alternatives (Robyn)
Olympic could change the customer loyalty program to one just like Enterprise
Pro’s-Bringing in repeat customers
Continuing modification based on industry trends
Cons Shifting of values
Pre established programs
Tiered based rewards
Pro’s- Encouraging customer loyalty
Different Based rewards
Cons- Cost of rewards
Pre Established programs
Establishment of strategic partnerships
Recommendations (Robyn & Phil) feel free to add or edit
Olympic Rent a Car should differentiate from the other companies by proving they are an elite provider and split their efforts between elite (group for those whom service is more important than lowest price) and regular customers and balance between value and volume avoiding risk of failure by transitioning 100% in to Elite club .
Olympic should increase their customer base by partnering with small local rental car providers, and maybe partner with mobile providers. Consumers are becoming tech savvy and becoming comfortable with online transactions, therefore Olympic should create an app to make renting for customers easier from anywhere. Adopt a dollar based reward system to increase customer spending and to build loyalty.
Olympic needs to enhance their long-term competitive position through their consumer power. This would come from access to information online, which would therefore increase the number of consumers switching brands for a lower price. Olympic also needs to actively adapt and respond to the changing market. Since the number of customers booking online has increased, the amount of online advertising should also increase. Customers are looking for products that hold their value, but are low-priced and convenient to purchase. Customers are targeted through advertising and budle sites.
Lastly, Olympic would have a sustainable market advantage over their competitors. Olympic would be the market leaders, and would be held accountable to build successful relationships with third party vendors. As a result of Olympic building relationships with third-party vendors, it would be difficult for competitors to copy their strategy right away.
Implementation Plan (Phil) feel free to add or edit. Bullets need to be put into sentence form.
Work with digital agency to craft a digital strategy via tools such as Search Engine Optimization and making their site is user friendly
Work with third party booking sites to strike agreements for bundle pricing
Track click through rate of consumers coming from online bookings
Track consumers signing up to become members of Olympic Car members after online bookings
Contingencies and Controls Please add to this