CASE MEMO OLYMPIC RENT A CAR
From : Elena Vignerte
To : Russel Lacey
MBA – MARKETING
Nov. 11 – 2014
CASE MEMO
Olympic Rent-A-Car US : Customer Loyalty Battles
CASE SUMMARY :
Olympic-rent-a-car is one of the US car renting company leader. The company was founded in 1976 by John Uelses, with a franchising model. The initial strategy of the company was to price lower than the main competitors. With a promotion, advertizing and franchizing strategy, the company reached to catch 7% of the market shares in 2012. By starting operating in the major airports, the company reached to extend by acquiring new smaller firms : in 2012 the company counted more than 460 rental locations across the USA and possessed a huge car fleet even if is still below the industry average.
To catch new clients and to compete with his competitors the Olympic company is using customer loyalty programs : this strategy enables long-term gains and provide also useful information about the clients. The rewarding loyalty strategy is not new and has evolved trough the years. It was developed in the early 1990’s with mass loyalty programs. This strategy was used by Green stamp company which used coupons and trading until 1960’s. In the begining of 1980’s American Airlines created the frequently flyer programs. This successful strategy was extended to all industries : it allows rewarding loyalty but also it enables identifying most profitable customers.
The US car rental industry is a specific industry that generates 24billion dollars. This business was created by 1961 by John Elis Saunders and experiences a real growth since the end of World War II. The rental car revenues are closely linked to leisure and business expenses. Since 2009 the prices have increased. Although, a key specificity of the car rental industry is that fleet size needs to match the demand to be profitable. The car rental industry is also characterized by variable pricing and data management. The largest expense is spent on fleet vehicles purchase and
To : Russel Lacey
MBA – MARKETING
Nov. 11 – 2014
CASE MEMO
Olympic Rent-A-Car US : Customer Loyalty Battles
CASE SUMMARY :
Olympic-rent-a-car is one of the US car renting company leader. The company was founded in 1976 by John Uelses, with a franchising model. The initial strategy of the company was to price lower than the main competitors. With a promotion, advertizing and franchizing strategy, the company reached to catch 7% of the market shares in 2012. By starting operating in the major airports, the company reached to extend by acquiring new smaller firms : in 2012 the company counted more than 460 rental locations across the USA and possessed a huge car fleet even if is still below the industry average.
To catch new clients and to compete with his competitors the Olympic company is using customer loyalty programs : this strategy enables long-term gains and provide also useful information about the clients. The rewarding loyalty strategy is not new and has evolved trough the years. It was developed in the early 1990’s with mass loyalty programs. This strategy was used by Green stamp company which used coupons and trading until 1960’s. In the begining of 1980’s American Airlines created the frequently flyer programs. This successful strategy was extended to all industries : it allows rewarding loyalty but also it enables identifying most profitable customers.
The US car rental industry is a specific industry that generates 24billion dollars. This business was created by 1961 by John Elis Saunders and experiences a real growth since the end of World War II. The rental car revenues are closely linked to leisure and business expenses. Since 2009 the prices have increased. Although, a key specificity of the car rental industry is that fleet size needs to match the demand to be profitable. The car rental industry is also characterized by variable pricing and data management. The largest expense is spent on fleet vehicles purchase and